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How to calculate a selling price from a target margin in Excel and Google Sheets
Topic:Finance basicsExcel & Google Sheets
=B2/(1-C2)✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Product | Cost | Target Margin | Selling Price |
| Item A | 60 | 0.4 | |
| Item B | 120 | 0.35 | |
| Item C | 80 | 0.5 | |
| Item D | 200 | 0.3 |
=B2/(1-C2)→100
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Step by step
- 1Set up columns: Product, Cost, Target Margin (as a decimal, e.g. 0.4 for 40%), Selling Price.
- 2In D2, enter =B2/(1-C2) — this divides cost by (1 minus the margin) to get the required price.
- 3Copy the formula down for each product row.
- 4Format the Selling Price column as currency.
Tips
- Enter target margin as a decimal (0.4) not a percentage (40%) unless you format C2 as a percentage cell, which stores 0.4 internally either way.
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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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