Default Margin Percentages

Big Business reports Profit Percentage on many reports and for consistency uses Margins, not Markup, for Default Margin Percentages to calculate pricing. This Solution explains Default Margin Percentages. (6123)

Big Business reports Profit and Profit Percentage on many reports. If a sales report lists an item that sold for $10 at a cost of $8, Profit will show $2 and Profit Percentage will show 20%. 20% of the $10 sell-price is Profit.

In the Item Prefs you can set Default Margin Percentages to apply to items to calculate pricing. Margins are the same as Profit Percentage. If you apply a 20% Margin to an item with a cost of $8 the resulting price is $10. So, 20% of the sell-price is Profit.

This is different than Markup which is often expressed as a percentage of cost. For the item whose sell-price is $10 with a cost of $8, the Markup is $2, which is 25% of the cost. Using a 25% Markup results in 20% Margin or 20% Profit.