Discount Ceiling
The lowest price that holds a margin is cost divided by (1 − margin). Work out what share of the list price that is, and one minus it is the discount you can afford.
Your numbers
Discount ceiling
37.5%
Sale price
7,500
Profit
1,500
What it means
You can go to 37.5% off and still hold the margin.
Formula
Discount ceiling = (1 − Cost ÷ ((1 − Margin floor ÷ 100) × List price)) × 100
This margin is measured on the sale price. Holding 20% as a markup on cost gives a different floor, so check which one you mean.
What to enter
| Input | Default | Accepted range |
|---|---|---|
| CostWhat it cost you to buy or make. Sale price minus this is profit. | 6,000 | 0 and up |
| List priceThe price before any discount — the "was" price on a receipt. | 12,000 | 0 and up |
| Margin floor (%)The margin you refuse to go below, however deep the discount. | 20 | 0 ~ 99 |
Step by step
Quick reference table
Results when only Cost changes and everything else stays put.
| Cost | Discount ceiling (%) | Sale price | Profit |
|---|---|---|---|
| 3,000 | 68.8 | 3,750 | 750 |
| 4,500 | 53.1 | 5,625 | 1,125 |
| 6,000 | 37.5 | 7,500 | 1,500 |
| 9,000 | 6.3 | 11,250 | 2,250 |
| 12,000 | 0 | 15,000 | 3,000 |
What each result means
| Result | At default values |
|---|---|
| Discount ceiling (%)The deepest discount that still leaves that margin standing. | 37.5 |
| Sale priceWhat you actually hand over at the till, after the discount. | 7,500 |
| ProfitSale price minus cost. | 1,500 |
Common mistakes
This margin is measured on the sale price. Holding 20% as a markup on cost gives a different floor, so check which one you mean.
Glossary
- Cost
- What it cost you to buy or make. Sale price minus this is profit.
- List price
- The price before any discount — the "was" price on a receipt.
- Margin floor
- The margin you refuse to go below, however deep the discount.
- Discount ceiling
- The deepest discount that still leaves that margin standing.
- Sale price
- What you actually hand over at the till, after the discount.
- Profit
- Sale price minus cost.
Frequently asked questions
Q. How is Discount Ceiling calculated?
Discount ceiling = (1 − Cost ÷ ((1 − Margin floor ÷ 100) × List price)) × 100 — The lowest price that holds a margin is cost divided by (1 − margin). Work out what share of the list price that is, and one minus it is the discount you can afford.
Q. Can you walk through an example?
With Cost 6,000, List price 12,000, Margin floor 20%, the answer is Discount ceiling 37.5%.
Q. What do I need to enter?
Enter Cost, List price, Margin floor. The result recalculates as you type, and an empty box counts as zero.
Q. How much does the answer move if I change a number?
Changing only Cost moves the answer to Cost 3,000 → Discount ceiling (%) 68.8 and Cost 12,000 → Discount ceiling (%) 0. The table below lays out five steps.
Q. How are the numbers rounded?
Money is shown to the nearest whole unit, percentages to one decimal place and everything else to two. What you see is rounded; the calculation itself carries the unrounded value forward.
Q. Anything to watch out for?
This margin is measured on the sale price. Holding 20% as a markup on cost gives a different floor, so check which one you mean.
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