Profit / Markup question.

[BUGMAN]

Okay I am curious to know how this is going to turn out...

The question is:

If you buy a car for $13,000 and then sell it for $26,000 what would your profit be and what would the mark up of the sale be?

I know this sounds stupid for some of you but it has really confused a lot of people on other forums so I just had to ask here and see what happens.

Just curious and looking for your .

[ironchef]

Profit - $14k, markup $14k.

[quickdodge®]

If I remember my math correctly, your profit would be 100% and wouldn't the markup be 200%? Later, QD.

[ironchef]

If I remember my math correctly, your profit would be 100% and wouldn't the markup be 200%? Later, QD.

Profit margin would be a 100%.

[BUGMAN]

If I remember my math correctly, your profit would be 100% and wouldn't the markup be 200%? Later, QD.

Ya think?

Profit - $14k, markup $14k.

Did you mean $13k?

[ironchef]

Ya think?



Did you mean $13k?

Yea, misread the numbers lol.

[JennB]

Markup is 100%

Markup is the percentage charged over cost.


Links because no one will believe me:

http://www.steinermarketing.com/calc_markup_pricing.htm

http://www.dinkytown.net/java/ProfitMargin.html


Equation to calculate markup

Solved for Markup:
Markup = (Total / Original) − 1

[BUGMAN]

Markup is 100%

Markup is the percentage charged over cost.


Links because no one will believe me:

http://www.steinermarketing.com/calc_markup_pricing.htm

http://www.dinkytown.net/java/ProfitMargin.html


Equation to calculate markup

Solved for Markup:
Markup = (Total / Original) − 1

Oh I believe ya without a doubt. I have a few people on other forums that has no concept of simple math or business intuition. I have been running my own business for over 11 years and in the stock market game for over 9 of those years.

It just kills me that so many people out there doesn't know simple math and do their own taxes.

[JennB]

I'm an accountant.



So yeah, I do my own taxes... haha. I've been in accounting for 8 years (not counting school) and the last five have been as the head of accounting for the entire US division of a European owned software company. I do my best to know as much about finance, business and money as I possibly can.

There are a lot of things I don't know, but accounting certainly isn't one of them.


And good for you. As a financial professional, I love to see people taking charge of their own money instead of being scared of it or just passing it on to someone else.

[ironchef]

So do you actually like accounting at all? I like numbers and math, but I couldn't stand accounting (classes not actual employment). It was easy, but SO boring.

[BUGMAN]

And good for you. As a financial professional, I love to see people taking charge of their own money instead of being scared of it or just passing it on to someone else.

Thanks, I am loving it myself.

I don't consider myself a professional but just another hard working high school drop out making the money thing work. However I did have Trig ll my Jr. year so math is no issue here.

FYI This argument started about a guy buying a car for 13k and selling it for 26k and they were arguing that it was a 50% profit since 13k was 50% of the selling price. Not understanding that he got his 13k back and then made 100% of it back on top of that. Err people aggravate the heck out of me with stuff like that.

P.S. I love my accountant!!!

So do you actually like accounting at all? I like numbers and math, but I couldn't stand accounting (classes not actual employment). It was easy, but SO boring.

Ha Ha you don't have the patience either? Man I can't sit still long enough to add anything up but payroll and I hate that.

[JennB]

So do you actually like accounting at all? I like numbers and math, but I couldn't stand accounting (classes not actual employment). It was easy, but SO boring.

I truly love what I do.

I hated it in school as well... funny thing. It's nothing like that when you work in it though. I've done public accounting in a firm, business tax returns and general tax work and now I am in private industry and just do everything from controlling the actual cash to profit and loss, budgets, KPI's, and other analysis for my company. I do easy stuff like payroll as well.

Working in public accounting was great because I had 80 clients that I was responsible for through out the year and then during tax season, their tax returns and any others I needed to pick up that were not full year clients. For my 80 base clients, I did any general accounting they needed through the year, audit follow up work for them, checking their books at intervals to make sure their accounting was correct and then producing financial statements for them. It was really cool because my clients were all kinds of businesses and I learned about them all. I did accounting for a hospital emergency room, an interior design business, a law firm, a non-profit agency, a pilates studio, dentist office, a printing company and countless more and I learned about them all and what goes into running that kind of business.

During tax season, it was hard. 70+ hours a week, weekends, nights, tons of work and pressure but it was always snowing so I had nothing else to do anyway... haha. It was really great working with people who had been in accounting for decades and I learned a ton.

One of my clients decided to seriously expand their business and they hired me out and now I work in private industry. I work for one business with no overtime, lots of control of my own work and it's great. The job stabilty of the industry is a real plus.

I know.. that was a long response but I wanted to try to explain that accounting isn't one job and one duty, depending on where you are and who you work for, it can be a very different experience.

[ironchef]

Hmm interesting. Typically I think Accounting in a way would almost be a perfect career choice for me. I like numbers, math, and logic. I guess I would have to actually experience it to see if I like it, but I don't feel like getting an accounting degree to do so.

[BanginJimmy]

Profit margin would be a 100%.

not really, to figure profit margin you have to subtract the costs of doing business also. How much did it cost to get the vehicle there, how much commission is paid to the salesman, that aprticular vehicles share of the electic bill and so on.

My best guess is that profit magin would be right around 70% in this particular sale.

[ironchef]

not really, to figure profit margin you have to subtract the costs of doing business also. How much did it cost to get the vehicle there, how much commission is paid to the salesman, that aprticular vehicles share of the electic bill and so on.

My best guess is that profit magin would be right around 70% in this particular sale.

These kinds of variables weren't presented in the original question, thus the profit margin is still 100%.

[BUGMAN]

Yes it is 100%. The guy was a friend so there was no salesman involved and being a cash deal.

You were presented with the proper information on this transaction.

But he does have a point in a lot of cases. Man do I know that scenario too well.

[ironchef]

Yes it is 100%. The guy was a friend so there was no salesman involved and being a cash deal.

You were presented with the proper information on this transaction.

But he does have a point in a lot of cases. Man do I know that scenario too well.

No doubt, just not in this particular situation.

[JennB]

My first bookkeeping job when I was still in college was at a car dealership. I very, very familiar with this and as was said, in this case it's 100%.

I do not miss working in dealerships. I tried it out because I love cars and wanted to be around them and damn it sucked. I did get to drive a LOT of cars since I was the 21 year old girl that worked in the office and had to take things to the tag office and bank just about every day and I drove anything I wanted off the lot to get there but other than that... ugh.

[JennB]

I got negative repped for being right

I'm hurt... really. (I can't even begin to explain how much sarcasm is behind that statement)

[ironchef]

I got negative repped for being right

I'm hurt... really. (I can't even begin to explain how much sarcasm is behind that statement)

Some people can't accept being "wrong".

[JennB]

It's not like I called anyone out or was mean about. Everyone makes mistakes.

[BUGMAN]

I got negative repped for being right

I'm hurt... really. (I can't even begin to explain how much sarcasm is behind that statement)

Ha Ha only the kiddies care about the reps anyway.

[quickdodge®]

Ha Ha only the kiddies care about the reps anyway.

Must be Maniac. Lolol. He's the only one I know that ever really cared about them. Later, QD.