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How to calculate a selling price from a target margin in Excel and Google Sheets

Topic:Finance basics
Excel & Google Sheets
=B2/(1-C2)
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Verified example

Computed by a real spreadsheet engine on the sample data below.

ProductCostTarget MarginSelling Price
Item A600.4
Item B1200.35
Item C800.5
Item D2000.3

=B2/(1-C2)→100

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Step by step

  1. 1Set up columns: Product, Cost, Target Margin (as a decimal, e.g. 0.4 for 40%), Selling Price.
  2. 2In D2, enter =B2/(1-C2) — this divides cost by (1 minus the margin) to get the required price.
  3. 3Copy the formula down for each product row.
  4. 4Format the Selling Price column as currency.

Tips

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Frequently asked

What is the difference between margin and markup?

Margin is profit divided by selling price; markup is profit divided by cost. For a 40% margin use =Cost/(1-0.4); for 40% markup use =Cost*1.4.

How do I verify the margin from the resulting price?

Use =(D2-B2)/D2 to confirm the gross margin percentage matches your target.

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Formulas used

IFERRORROUND / ROUNDUP / ROUNDDOWNSUMSUMPRODUCTRADIANSMINPERCENTRANKTRIMMEAN

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Written and reviewed by FormulaCraft Team. Each formula on this page is run through our verification engine before publishing.

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