PDA

View Full Version : Formula for Calculating Sales Margins less all discounts



jasonr704
10-01-2010, 10:25 AM
I'm looking for the "correct" way to calculate %Margin when there are discount and commission present. Would it be?

margin = (Revenue-(discounts+commissions))/revenue*100

Revenue = $2500
Discounts = $1000
Commission = $250

ie.
(2500-1250)/2500
Margin = 50%
ROI = 200%

Bob Phillips
10-01-2010, 11:17 AM
Wouldn't you need initial cost as well to work out the profit?

jasonr704
10-01-2010, 11:34 AM
sorry, assume a gross cost basis of 0

Bob Phillips
10-01-2010, 11:37 AM
So

=(Revenue-(Discounts+Commission))/Revenue

formatted as a percentage looks about right to me