Working out sales margin question

[Qazxswe]

I am using two separate formula's to work out margin on a product but getting different answers.

Cost price is £302.50 To add 8.5% I am using =A4*(1+B4) where A4 is £302.50 and B4 is 8.5% - this gives me a sale price of £328.21

I then want to sanity check this by using the actual figures and Excel to tell me the % increase.

Cost price is £302.50. Sale Price is £328.21 Using =(price-cost)/price and formatting the result as a % I get a margin of 7.8%

Why is there a discrepancy?

 

[Joe4]

Cost price is £302.50. Sale Price is £328.21 Using =(price-cost)/price and formatting the result as a % I get a margin of 7.8%

Why is there a discrepancy?

You are dividing by the wrong number.
It should be: (sale price - cost price)/cost price

 

[Qazxswe]

I'm an idiot - thanks!

 

[Joe4]

You are welcome!

Common error! I just always remember that you want to divide by "where you started from" to get the percentage increase.