Profit Margins and Mark Ups

camnix

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

camnix

Sales margin is 40% not 144000

PeterC

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

camnix

This is what I came to it just seemed quite a large margin, but that clarifies the method I am using is correct.

Many thanks

PeterC

You're welcome

For more information, see:
media.wix.com/ugd/9a8e75_ff42b2bfe9e54dd393f4545e338d069e.pdf