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Free Profit & Discount Calculator
10/22/17

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This is a special free profit and discount calculator to help you figure out your sales, profit margins, and discount percentages. This is a simple calculator page and does not affect any actual database values. Feel free to experiment and change things around. All of the fields are required. See the help file for more information.

This is a scaled down version (generic public version) of the profit calculator that is used inside of the main adilas.biz application. The full version gets dynamically tied in and gets data passed to it from all the add/edit unit pages, add/edit parts or general inventory pages, shopping cart pages, profit per line reports, and stock/unit detail pages.
Enter Values Below :: Start With Known Values
Quantity:
* (default = 1 :: positive or negative values allowed)
Item Cost:
* (must be 0 or above)
Pricing Options:
(choose only one)
Saleprice, List Price, or Fixed Price (must be 0 or above)
Use A Mark-Up On Cost (must be greater than one :: ex: 1.65)
% Profit Margin, Profit Percentage, or Points (ex: 20 or 43.5)
Discount:
% * (default = 0 :: ex: 10)
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Math Help & Formulas
Mark-Up Price
** Formula ** :: Mark-Up Price = Cost * Decimal Mark-Up

A 65% mark-up would be written as "1.65". The extra "1" helps make sure that the cost gets added back in. The mark-up price is then rounded to a certain number of decimals. There is also an alternate formula if you want to use the mark-up as its own decimal percentage (65% = 0.65): Mark-Up Price = (Cost * Mark-Up) + Cost

Note: A mark-up and a profit margin are totally different. A 25% mark-up only yields a 20% profit margin. This is one of the most common mistakes in business. This is one of the main reasons this profit and discount calculator exists.
Calculated Mark-Up
** Formula ** :: Calculated Mark-Up = Price / Cost

This is done if the mark-up decimal is not known or not passed in. The formula only works if the cost is not 0.00 (division by zero error).
Basic Profit
** Formula ** :: Profit = Price - Cost (pretty straight forward)
Profit Percentage
** Formula ** :: Profit Percentage or Profit Margin = (Profit / Price) * 100

This is the formula for calculating a profit percentage or margin. This is what the business owners and/or the banks want to see. Both the cost and price must be already known or they may be easily calculated. The price can't be 0.00 or it will cause a division by zero error. The profit margin is often confused with the mark-up decimal. The profit margin shows what was made (percentage) and the mark-up decimal helps determine the selling price.

Note: The reason a mark-up decimal is used instead of a profit margin on determining prices is because a mark-up uses simple multiplication (times) and works every time even if 0 is used. It also figures in the profit margin without any division. A profit margin uses division and therefore requires conditional logic (if then). For example, if you wanted to run a report with thousands of items, a mark-up takes the cost times the mark-up value and your done. In order to calculate the profit margin on all of those items it would require a loop and a small function to calculate profit (price minus cost) and then a check for proper division (if it passes the test). Because it doesn't work every time and needs to be checked, it is not the optimal method of calculating. Humans would much rather see this number (profit percentage) but computers and programmers use the other method because it is easier and faster. The down side to the speed of the reports is the education that is required for business owners and their staff.
Price Per Margin
** Formula ** :: Calculated Price From A Profit Margin = Cost / (1 - (Margin / 100))

This formula is used if a cost and desired profit margin are known. The goal of this formula is to figure out what price to charge in order to get the desired profit margin (basically, the variable becomes price). There are a number of rules that need to be met for this formula to work. Some of the rules are: Cost must not be set to 0.00 (0 times anything = 0). The profit margin can't be exactly 100 because it creates a division by zero error. It is also physically impossible for a 100% margin to be reached if a cost exists. Eventually you reach a point of diminishing return trying to get close. It is usually best to back out to a 90 or 99% margin (if that high of a margin is really needed).

Tip: If you know that you want to make 40 points (profit margin) on a sale but don't know the exact cost, give it a good guess and then try it (don't leave it at 0.00). You may also need to pad the deal until you know actual cost. This entire formula is based on the set cost and desired outcome margin.

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