Course outline / Mathematical functions
Lesson 61 of 75 · Intermediate · 5 exercises
Business maths
Profit, margin, markup and break-even with simple formulas.
What you'll practise
- Profit on each item
- Profit margin
- Markup
- Profit after fixed costs
- Break-even point
Profit on each item
Profit per item is what you charge minus what it costs you.
In cell F2, work out the profit on one mug: price (C2) minus cost (B2).
Profit margin
Margin is profit as a share of the price. Shops and investors use it to compare products.
=(price - cost) / price
In cell F2, work out the margin on a mug.
Markup
Markup is profit as a share of the cost. It answers: how much did we add on top of what we paid?
=(price - cost) / cost
In cell F2, work out the markup on a mug.
Profit after fixed costs
Fixed costs, such as rent, have to be paid however many items you sell. Total profit is the profit per item times the units sold, minus fixed costs.
In cell F2, work out total profit: (C2-B2) times the units in D2, minus the fixed costs in G2.
Break-even point
The break-even point is how many items you must sell to cover fixed costs: fixed costs divided by profit per item. You can't sell part of a mug, so round up.
In cell F2, use ROUNDUP to work out how many mugs cover the fixed costs: G2 divided by (C2-B2), with 0 decimal places.
Try it in a real spreadsheet
Every step checks your answer instantly and tells you exactly what to fix.