Determine percentage to reach desired percentage 1.e profit margin

[Jared Allen]

Hi,

I am trying to figure out a formula to generate a reduction rate to reach a desired percentage value.

I have attached a picture showing what I want to achieve to the best of my descriptive items.



Aas you can see I have a profit margin of 27.16% and I want to reach a profit margin of 20%. I manually typed in the reduction value until it gave me the 20% I was chasing.

Can anyone please help me to determine a formula where I can use the cells in excel to determine exact values. As the percentage do not finish to a neat 2 decimal place?

Thanks in advance.

 

[Deleted member 4993]

Hi,

I am trying to figure out a formula to generate a reduction rate to reach a desired percentage value.

I have attached a picture showing what I want to achieve to the best of my descriptive items.

View attachment 28691

Aas you can see I have a profit margin of 27.16% and I want to reach a profit margin of 20%. I manually typed in the reduction value until it gave me the 20% I was chasing.

Can anyone please help me to determine a formula where I can use the cells in excel to determine exact values. As the percentage do not finish to a neat 2 decimal place?

Thanks in advance.

Please tell us the equation you use to calculate ROI (%) from given:

Original total cost

and

Adjusted retail value.

 

[JeffM]

This makes very little sense.

In your first example, the difference between adjusted retail value and original total cost equals profit, and profit divided by original total cost equals ROI. That sort of makes sense although it is not clear whether and how adjusted retail value differs from proceeds on sale and whether and how original total cost differs from total cost. I wonder whether all these numbers should be labeled “projected.”

Then, in your second example, total costs and retail value have both disappeared.

 

[Jared Allen]

Please tell us the equation you use to calculate ROI (%) from given:

Original total cost

and

Adjusted retail value.

My equation is:

Original cost = x
Adjusted retail value = y

So therefore ROI = (y-x)/x

 

[Jared Allen]

This makes very little sense.

In your first example, the difference between adjusted retail value and original total cost equals profit, and profit divided by original total cost equals ROI. That sort of makes sense although it is not clear whether and how adjusted retail value differs from proceeds on sale and whether and how original total cost differs from total cost. I wonder whether all these numbers should be labeled “projected.”

Then, in your second example, total costs and retail value have both disappeared.

Hi Jeff,

You are right about the first equation..as everything is projected or forecasted from variables from previous cost planning exercises.

The second one is now trying to determine the maximum price we can pay for a land parcel if we reduce our ROI to only 20%. The original land purchase price is a variable that is included in the original total cost.

I am trying to figure out how to reduce ROI to 20% to allow to allow for the higher price to pay the land owner.

I hope this makes further sense.

Thanks,

 

[Deleted member 4993]

ROI = (y-x)/x

y = x * (1 + ROI)

 

[Jared Allen]

y = x * (1 + ROI)

That equation doesn't work for what I am trying to achieve.

I want to achieve an ROI of 20%. Curently the ROI is 27.16%.

As you can see in the attachment, if profit equals approx only $731,306.47 it will give me an ROI of 20.00%.






So as you can see on B141 cell that has the value of 26.36%. I got to this value manually by just entering numbers until it reached the 20% in cell D143.

I would like to know if there is a way where I can put a formula in here to reach the desired ROI of 20%.

Thanks,

 

[Jared Allen]

I have figured it out,

I just changed my set-out of the descriptions and now it works.



Thanks Subhotosh Khan for your help, much appreciated.