1. What is Markdown?

Markdown is the difference between the original price of an item and its sale price. It represents the amount of price reduction applied to the original price.

2. How Does the Calculator Work?

The calculator uses the markdown equation:

Where:

• Original Price — The initial price before discount
• Sale Price — The reduced price after discount

Explanation: The equation simply subtracts the sale price from the original price to determine the markdown amount.

3. Importance of Markdown Calculation

Details: Calculating markdown helps businesses understand their pricing strategies, profit margins, and discount effectiveness. It's crucial for inventory management and sales analysis.

4. Using the Calculator

Tips: Enter the original price and sale price in the same currency. The sale price should be less than or equal to the original price for valid results.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between markdown and discount?
A: Markdown is the absolute amount reduced (e.g., $10), while discount is usually expressed as a percentage (e.g., 20% off).

Q2: Can markdown be negative?
A: No, valid markdown is always zero or positive. Negative values would indicate the sale price is higher than the original price.

Q3: How is markdown percentage calculated?
A: Markdown percentage = (Markdown Amount / Original Price) × 100

Q4: Why is markdown important in retail?
A: It helps track price reductions, manage inventory, and analyze sales performance.

Q5: Does markdown affect profit margin?
A: Yes, markdowns reduce the profit margin on individual items but may increase overall sales volume.