In some businesses, accountants and other managers have to simultaneously work with both markups (cost or net amount plus a percentage) and discounts or mark-downs (total or gross amount less a percentage). The five values you see can be either a user input or a calculated result. This calculator allows you to calculate three values by entering just two values.
Net Amount is either the amount to which the markup is added or it is the amount after the discount is applied.
Markup percentage is the percentage added to the net amount. $100 plus a 5.0% markup results in a Gross Amount of $105.
The Amount is $5.00, that is the difference between the Net Amount and the Gross Amount.
The Discount Percent is the percentage deducted from the Gross Amount. $105 minus a 5.0% discount equals a Net Amount of $99.75. (The Amount is $5.25).
Gross Amount is either the amount from which the discount percentage is subtracted or it is the amount after the Markup percentage is applied.
Example 1: You purchased 1,000 shares of stock for a total price of $23,554.00. Enter this in the "Gross Amount". You later sold the stock for a loss and you received only $19,054.00. Enter this in the "Net Amount. Click [Calc]. The Discount Percentage is your percentage lost i.e. 19.1%. The Markup Percentage is the percentage you have to make on a trade to make up the loss i.e. 23.6%. This, of course, assumes you are going to reinvest the entire $19,054 that was returned from the first trade.
Example 2: Sales tax is a markup percentage. Sales tax is added to the net sales amount. If you want to sell or advertise an item at a price that includes sales tax, you can't simply use the sales tax rate and use that percentage to calculate a deduction from the sale price to know the net selling price. To easily calculate the net selling price, enter the total gross price, including the tax amount that you want to sell the item for in the Gross Amount - say $495.00. Enter the sales tax rate into the Markup Percentage, say 7%. The other three inputs (Net Amount, Amount and Discount Percentage are set to 0.0). Calculate.
The Net Amount, before sales tax is $462.62 and the Amount (the sale tax in this case) is $32.38
Example 3: You can use the calculator to calculate the net purchase amount assuming a known markup. If you can sell an item for $75 and you want to make a 30% markup, what price do you have to pay for the item? Enter $75.00 for "gross amount" and 30% for the "markup percent". You have to buy at $57.69. The profit (or difference) is $17.31 and the markdown percent is 23.08%. You can use this to calculate the buy-to-cover price for a short position if you cover base on a profit goal.