What is a 5:1 markup?

Is it when your retail price is 5 times your cost?

I can understand mark ups and profit margins expressed as a percentage, but I'm confused here...

can you shed some light plesase

 

Yes, that's a 500% "mark up margin".

The margin for a 5:1 or 500% mark up isn't 500%.

Retail Margin = [(Retail - Cost)/Retail]*100
[(5-4)/5]*100 = 80%.

Which makes sense. If you sold it for five dollars and gave one dollar to the supplier you'd still have four of the five pieces left (80%).

 

^You've got the answer correct, but did you show the work right? The problem you show above would give you 20%.

I'd want something like [(5-1)/5]*100 = 80%.

 

Thanks you answered my question. Of course a profit margin cannot exceed 100% only "mark ups" can.