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A mathematical explanation of pricing based on target profit margins. The image shows how to calculate selling price (SP) from cost price (CP) and desired margin percentage. It includes a formula: SP = CP / (1 - Margin Target (%)), with an explanation that for a 20% margin, 80% of the selling price covers the cost. The image includes a worked example where CP = $80 and Margin Target = 20%, showing the calculation: SP = 80 / (1 - 0.2) = 80 / 0.8 = 100.

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A mathematical explanation of pricing based on target profit margins. The image shows how to calculate selling price (SP) from cost price (CP) and desired margin percentage. It includes a formula: SP = CP / (1 - Margin Target (%)), with an explanation that for a 20% margin, 80% of the selling price covers the cost. The image includes a worked example where CP = $80 and Margin Target = 20%, showing the calculation: SP = 80 / (1 - 0.2) = 80 / 0.8 = 100.
https://files.mastodon.social/media_attachments/files/113/799/555/699/548/363/original/488d7f95351cdcbc.png

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Raghav Agrawal (impactology@mastodon.social)'s status on Friday, 10-Jan-2025 02:49:39 JST Raghav Agrawal

Folks on the TL (just confirming how common it is to know this in these circles)
Do you understand proportional reasoning behind profit, margin, cost price, selling price calculations?
Can you determine how to adjust prices for buying or selling during negotiating discounts without losing margins

In conversation about 21 days ago from mastodon.social permalink