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# Strange one - Algebra!

Posted on 2012-08-23
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Hi, on a spreadsheet i want to work out the missing variable

I know the desired Gross Profit = .65
I know the Cost of Sale = 1.306

How can i derive the sales price using a formula on excel?

Thanks
Seamus
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Question by:Seamus2626

LVL 49

Expert Comment

Is the GP a percentage or an actual amount

SP = CoS + Profit

or

SP = CoS * (1 + ProfitPercentage)
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LVL 8

Expert Comment

On another note, if this is something you will do regularly and in different scenarios, look into "Goal Seek".

``````http://www.homeandlearn.co.uk/excel2007/excel2007s7p4.html
``````
``````http://office.microsoft.com/en-us/excel-help/about-goal-seek-HP005203894.aspx
``````
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LVL 37

Expert Comment

If gross profit is just 65 cents, then add them.
If it is a percentage, then do you mean you want 65% of the sale price to be profit?

GPP = Gross Profit Percent
SP = Sale Price
CS = Cost of sale

So CS/SP = 1 - GPP

or SP = CS/(1 - GPP)

julianH, in your formula, CoS is 65% greater than SP but the actual percent profit would only be 65/165 or about 39%
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LVL 37

Accepted Solution

And I don't think you need Goal Seek for this. Just plug that formula into the spreadsheet.
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Author Closing Comment

This is what i was looking for.

Thanks for everyones input

Seamus
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LVL 49

Expert Comment

@TommySzalapski I was going on the assumption he wanted to make a gross profit of 65%
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LVL 37

Expert Comment

SP = CoS * (1 + ProfitPercentage)
SP = 1.306*(1.65) = 2.1549
65% of 2.1549 is about 1.4 but profit is only 2.1549 - 1.306 = 0.8489
When the term Gross Profit is used, it generally refers to the percent of the price, not the percent of the cost.
If he wants a 65% markup, then your formula is the way to go.
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