The formula to calculate the Margin Multiplier (M) is:
\[ M = \frac{100 + P}{100} \]
Where:
A margin multiplier is a factor by which the cost price of an item is multiplied to achieve a desired profit margin. It is a useful tool for businesses to quickly determine selling prices that ensure a specific profit margin is maintained. The margin multiplier takes into account the cost of the product and the percentage of profit margin desired to arrive at the correct selling price.
Let's say the desired profit margin percentage (P) is 25%. Using the formula:
\[ M = \frac{100 + 25}{100} = 1.25 \]
So, the Margin Multiplier (M) is 1.25.
