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How do you calculate a 20% profit margin?

Asked 2 years ago

Jax Pearson

Friday, January 21, 2022

Profit Margin is the amount of profit your business is left with once all the expenses are deducted from the total revenue. To calculate profit margin 20%:

  1. Divide 20 by 100 to convert into decimal form. The answer would be 0.2.
  2. Deduct this 0.2 from 1 to get a figure of 0.8.
  3. Take the original price of your product and divide it by 0.8.
  4. Consider the answer as the price you should charge to earn a 20% profit margin.

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