HMASCR5600 - Ratio Analysis: What is the Mark-up Ratio test?


Mark-up is the amount, or percentage, a trader adds to the cost price of goods, in order to achieve a profit. The mark-up is the profit percentage based on the cost of goods sold.

The formula is:

Mark-up=Turnover – Purchasesx100
Purchases


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Comprehensive guidance on the concept of mark-ups with practical examples is contained in V1-37 Control Notes: Assurance Techniques- Mark-ups.