How can I calculate desired selling price based on margin?

Question

I use the following formula to calculate profit margin:

$$\text{profit_margin} = \frac{\text{selling_price} - (0.15\cdot \text{selling_price}) - \text{sourcing_cost}}{\text{sourcing_cost}}$$

What would the formula for $\text{selling_price}$ look like if the $\text{profit_margin}=0.3$ and the $\text{sourcing_cost}=16$?

Thank you

Answer 1

Combine selling prices to get $$\frac{\text{selling_price} - (0.15\cdot \text{selling_price}) - \text{sourcing_cost}}{\text{sourcing_cost}}=\frac{0.85\cdot\text{selling_price}- \text{sourcing_cost}}{\text{sourcing_cost}}$$ then multiply both sides of your equation by the denominator and rearrange for the selling price.