Business percentage calculations
Business percentages go wrong in predictable ways. These are the four that cause the most arguments in meetings.
Margin is not markup
Markup is profit divided by cost. Margin is profit divided by the selling price.
Buy at $60 and sell at $100: that is a 66.67% markup but a 40% margin. Same money, very different headline. The Margin & Markup Calculator works out both from any cost and selling price.
Growth rates
Month-over-month growth uses the previous month as the base: (This month − Last month) ÷ Last month × 100.
Do not add monthly growth rates together to get an annual figure — compound them by multiplying the growth factors.
Churn, retention and conversion
Churn is customers lost divided by customers at the start of the period.
Retention is 100% minus churn for the same period and the same base.
Conversion rate is conversions divided by sessions, not divided by users — pick one denominator and stay with it.
Put it to work