Business and ecommerce
Margin, markup, conversion and churn rates, commissions and variance for people who run the numbers.
Business and ecommerceHow to calculate profit margin
Profit margin is profit divided by revenue, times 100. Gross, operating and net margin worked from one income statement, plus the per-product version.
Business and ecommerceMarkup vs margin: the difference and how to convert between them
Markup is profit divided by cost; margin is profit divided by price. The same sale gives different percentages. Conversion formulas both ways and a lookup table.
Business and ecommerceHow to set a price for a target profit margin
To hit a target margin, divide the cost by 1 minus the margin. Why multiplying cost by 1 plus the margin falls short, and how discounts eat into margin.
Business and ecommerceHow to calculate conversion rate and compare it between periods
Conversion rate = conversions ÷ visitors (or sessions) × 100. How to choose the denominator, read a funnel step by step, and avoid overreacting to small samples.
Business and ecommerceClick-through rate (CTR): formula and examples
CTR = clicks ÷ impressions × 100. Examples for ads, emails and search results, and why the CTR across several campaigns isn't the average of their CTRs.
Business and ecommerceHow to calculate customer churn rate and retention rate
Churn rate = customers lost ÷ customers at the start × 100. How to handle new customers in the period, calculate retention, and convert monthly churn to an annual figure.
Business and ecommerceHow to calculate budget variance as a percentage
Budget variance % = (actual − budget) ÷ budget × 100. How to label variances as favorable or unfavorable for costs and revenue, with a department-by-department example.
Business and ecommerceContribution margin ratio and break-even sales
Contribution margin ratio = (price − variable cost) ÷ price. Use it to find break-even sales: fixed costs ÷ contribution margin ratio. A worked example with a target profit.
Business and ecommerceHow to calculate sales commission, including tiered rates
How to calculate sales commission at a flat rate, with tiered (graduated) rates, and with retroactive tiers, all worked on the same $62,000 of sales.
Business and ecommerceHow to calculate market share
Market share = company sales ÷ total market sales × 100. Revenue share vs unit share, describing share changes in points, and relative market share.