The GP calculator is a quick calculator for buyers and sellers that calculates GP's, Cost, Sell and Profit on a product by product basis. In this regard the calculator can work on a product basis and the user is able to change 1 variable and note the commensurate changes in all the other variables for that product. You can therefore use it to calculate sell prices, cost prices, profit margins in percentages or dollars, and you have 4 screens so you can compare scenarios. You also have the ability to change GST rates so it is equally useful no matter what GST rate may be in effect. So the calculator can be used to answer for example:
What margin will I make at this sell price based on this cost?
What cost should I negotiate if I need to sell at this price and make this profit margin?
What sell price must I set to make this margin at that cost?
What is my GP% at these sell and cost prices?
What margin reduction will I have if I reduce my selling price by x%?
What does this GP% translate to in Dollar terms?
How much money do I make at that cost and sell?
How does GST change sell prices?
If I rounded up/down my sell prices what does that do to my profit margins?
Etc, etc, etc
The calculator also has the ability to calculate mixed or blended margin on a product or category basis. This function is usually useful when comparing different margins for different products or segments of products. It can be used to check a store wide margin by using individual department margins and sales contributions, or you can use it to calculate range margins based on segment margin and sales mix. This function is useful for analyzing target margins or sales share mix in a retail environment as well as to predict gross and net margins when mixing different category share and margin numbers. In addition you have 4 screens to compare scenarios. So the calculator can be used to analyze and assist to find an answer for (example):
What is my store margin based on this mix of category sales and margin contributions?
What margin should I make on this category given the sales mix in the store?
What share of sales (internal market share) should I target to achieve this margin?
Which category makes the greatest/lowest relative contribution to margin (CTM) in my mix?
Which category produces the highest CTM?
Where do I make the most actual money?
Which category should I give more/less opportunity to?
The calculator also has a promotional mix calculator which can be used to calculate the mixed margin a product or category will make based on its relative on/off promotion sales mix. In other words, it calculates the nett effect of price and margin fluctuations for either a product, range or category. Changes to promotional mix of sales and margin will result in a new, mixed margin for the category. So the calculator can be used to analyze and assist to find and answer for (example):
If I increase/decrease my promotional frequency/mix at this margin%, what will the effect on my overall margin% be?
If I increase my promotional margin% and hold the sales mix the same, how will my margin% change?
If I decrease/increase my normal shelf price sales mix, what will the overall effect on my nett margin% be?
What will a second tier promotional mix deliver at this new margin %?
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