Hacker News new | ask | show | jobs
by ahmeneeroe-v2 1003 days ago
can you do the math but without the price increase to $110 and let us know how that margin compares to the 12.72% profit margin at $100?
1 comments

If I understand your question, you’re asking what the profit margin would be if the cost went up 20% from $80 to $96 while the sell price stays at $100.

The profit margin would be 4%, $100-$96 leaves $4 of profit. 4/100=0.04, multiply that by 100 to get 4%.

To maintain your previous profit margin if the cost to produce goes up by N%, your selling price must also go up by at least N% at the minimum.

If sell price increase % is higher than cost increase %, your margin will expand. If the reverse is true, your margin will contract.