Commercial Finance Fundamentals: Pricing, Margin, and Interest Calculation

1. Sales Price, Cost, and Margin Calculation

Defining Sales Price and Commercial Margin

The sale price is determined based on the cost, increased by a rate called the commercial margin.

The selling price of a product is the result of increasing the cost price, adding selling expenses, and including the desired percentage of benefits to obtain.

The cost price (or acquisition cost) is the purchase price plus all associated costs incurred (transport, insurance, etc.), ensuring profitability in terms of the sale.

Gross Margin Calculation

GROSS MARGIN: The difference between the total revenue from the sale and the total purchase costs.

Gross Margin = PV - C (Selling Price - Cost)

To find the gross margin for each product:

Unit Gross Margin = PV_a - C_a (Unit Selling Price - Unit Cost)

If we know the total gross margin, we can also calculate:

Unit Gross Margin = Gross Margin / Number of goods or services

Commercial Margin = Gross Margin - Marketing Costs

Unit Cost Calculation Steps

Steps to Determine Unit Costs:

1. Calculate the PVP (Public Selling Price) Acquisition.
2. Calculate discounts (If there are different discounts for each product, calculate them separately).
3. Apply the commercial discount first.
4. Calculate the cash discount next.
5. Add other expenses.
6. Finally, add the VAT (Value Added Tax).

2. Determining the Total Sale Amount

Tax Base and Total Amount

The tax base of an operation is calculated by adding or subtracting from the gross amount the factors conditioning the sale (discounts, delivery charges, packaging, etc.).

The total amount will be the result of adding the appropriate VAT to the tax base.

Types of Discounts

• Commercial Discount: A reduction in the price of the item.
• Quantity Discount (Rappel): A reduction in the total amount granted for the purchase of large quantities of items.
• Discount for Prompt Payment: A reduction granted to purchasers who pay the purchase amount before the maturity period. It is applied to the resulting amount after the commercial and quantity (Rappel) discounts have been reduced.

Value Added Tax (VAT)

VAT typically has three types (rates), depending on the product in question:

• General (e.g., 16%)
• Reduced (e.g., 7%)
• Super-Reduced (e.g., 4%)

3. Interest in Commercial Operations

Definition and Types of Interest

Interest on Capital: This is the amount received as remuneration by the person who provides a certain capital (understood as an amount of money) for a specific period.

Interest can be calculated in two ways:

1. Simple Capitalization Scheme
2. Compound Capitalization Scheme

In Simple Capitalization, the interest earned does not produce further interest. In Compound Capitalization, it does. Simple Capitalization is preferably used in short-term operations, while Compound Capitalization is used in the long term.

Simple Interest Formulas

SIMPLE INTEREST:

I = [Formula missing in original text]

R = (I · 100) / (C · T)

T = (100 · I) / (C · R)

Time Basis (B)

The time basis (B) used in calculations can be:

• 365 (Calendar year)
• 360 (Commercial year)
• 12 (Months)
• 4 (Quarters)
• 3 (Semesters)
• 52 (Weeks)
• 1 (Years)

Amount Calculation

Amount (M) = Capital (C) + Interest (I)

Therefore: I = M - C