GM Question

[Dee]

Hi,

I am banging my head against the wall trying to figure this out, with no
success:

I currently have, for example:

Sales Cost GM $ GM%
12 10 2 17%

What I need to calculate is the following: What would I need to increase my
sales to if the cost remains at 10 and the GM $ remains at 2, but the GM%
changes to 15%?

Sales Cost GM $ GM%
? 10 2 15%

Any help would be greatly appreciated!

 

[Gary''s Student]

The reason you are having problems is that it can't be done.

If the GM$ is 2, then sales must be 12
If the margin on sales must be .15, then sales must be 11.76471

 

[Joyce]

Hi,

Thanks for our quick response.

Would it be possible if I keep the GM $ approximate?

In other words, do a type of goal seek to figure out the sales figure I must
achieve in order to maintain approximately the same GM $, having changed the
GM %?

Thanks again!

 

[Gary''s Student]

You can try using Solver or Goal Seek.

Another approach is to address cost.

Far too many people feel that cost "is what it is".
This may be true for you, but at least examine if cost can be reduced:

1. alternate suppliers
2. alternate workapproaches
3. alternate delivery approaches

The great thing about reducing cost is that it can benefit both GM$ and GM%