Profit Margins and Mark Ups
camnix
Registered Posts: 3
If I am given a inventory sales price and a sales percentage margin only, how can I find the cost price of the inventory?
e.g: inventory at selling prices is £240000
Sales Margin is £144000
what is the cost price of the inventory for the shops financial statements?
I know this is probably basic mathematic formulas but can anyone tell me what that formula is?
Thanks
e.g: inventory at selling prices is £240000
Sales Margin is £144000
what is the cost price of the inventory for the shops financial statements?
I know this is probably basic mathematic formulas but can anyone tell me what that formula is?
Thanks
0
Comments

Sales margin is 40% not 1440000

This question is really about percentages, although you do need to know that
Selling price = Cost price + profit
If the sales margin is 60%, this means that the profit is 60% of the selling price.
The other 40% of the selling price is the cost.
The selling price of the inventory is £240,000
40% of this is £144,000 so that is the cost
1 
This is what I came to it just seemed quite a large margin, but that clarifies the method I am using is correct.
Many thanks0 
You're welcome
For more information, see:
media.wix.com/ugd/9a8e75_ff42b2bfe9e54dd393f4545e338d069e.pdf0
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