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A couple of years ago, I blogged about the difference between margin and markup. Since then, there have been a number of occasions when I’ve wanted to know the formula to take two cells in Excel, one with a cost and the other with a margin percentage, and then calculate the price. I’m sure I’ve blogged that too, but I can’t find it now – so here it is (after I worked it out again this afternoon)…
Using the example above, the formula to calculate the price in cell C2, based on cost in A2 and margin in B2 is =A2/(1-B2).
This formula is markup not margin, there a difference between markup and margin.
Thanks for the comment Brad, and I know the difference – that’s exactly the point I made in the post that I linked right at the outset. This formula is calculating a desired margin. For example, 50% margin on a £2 price is £1 cost and £1 markup.
Your formula is correct, it is Margin, not Markup.