Percentage Profit Margin
The percentage profit margin is calculated as follows.
Variables
CostPrice = 10.00
RetailPrice = 20.00
VATRate = 17.5%
Calculate BeforeVAT
BeforeVAT = RetailPrice / ( 1 + (VATRate/100))
BeforeVAT = 20.00 / ( 1 + (17.5/100))
BeforeVAT = 17.02128
Calculate Profit
Profit = BeforeVAT - CostPrice
Profit = 7.02128
Calculate Percentage Profit Margin
PerProfit = (Profit / BeforeVAT) * 100
PerProfit = (7.02128 / 17.02128) * 100
PerProfit = 0.4125 * 100
PerProfit = 41.25%
Tags: Mathematics