GEM-CAR FAQ
How Do You Calculate a Profit Margin
The profit margin is the profit made based on the selling price of an item.
For example, for a garage that:
- has sales of one million dollars,
- has a profit of one hundred thousand dollars,
we would say it has a 10% profit margin.
Margin calculation: (Selling-Costing)/ Selling
To calculate the selling price from the cost based on a % margin:
Selling price formula: Cost/(1-Margin)
Ex: An item with a cost of $100 sold at a 40% margin will sell for $166.66.
- Selling = 100/(1-0.4) = $166.67
- Margin = (166.67-100)/166.67 = 40%.
By using GEM-CAR, you'll always be sure that the margin is correctly calculated in your management and billing software for mechanics and garages.
Posted
6 months
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by
Olivier Brunel
#198
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Edited
4 months
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