**What
is personal financial analysis?**

Financial analysis is the process of

assessing the performance and appropriateness of firms, projects, budgets, and

other financial activities. Financial analysis is commonly used to determine if

a business is stable, solvent, liquid, or lucrative enough to merit monetary

investment. As a result, while evaluating and analyzing from an individual

standpoint, we must consider if the item is edible enough to merit a monetary

value for consumption.

**What**

is retail and wholesale price

is retail and wholesale price

A substantial portion of the commerce done

in our world consists of purchasing items and then reselling them to someone

else for a profit. When we establish pricing or determine how effective those

prices will be in fulfilling a company’s profit goals, mathematics is

unavoidably involved. Therefore, we’ll look at some of the most common

mathematical metrics and methods for setting and evaluating pricing or

financial analysis. We’ll stick to the common convention that the price that a

firm pays for an item is referred to as the wholesale price or cost. The retail

price is the price at which a company sells an item. The retail price is the

ultimate price at which a product is sold to customers, also known as end-users

or consumers. That is, those buyers do not purchase the goods to resell them, but

rather to consume them. Retail pricing is distinct from manufacturer and

distributor prices, which are determined from one seller to the next throughout

the supply chain. In competitive, free markets, the retail price is established

by the ultimate seller or retailer after considering costs as well as supply

and demand circumstances.

**Financial analysis of**

cost known as “Markup”

cost known as “Markup”

Markup based on cost is a typical

way for determining an item’s selling price; hence, markup is the price

difference between the selling and purchasing price. This technique is simple

and corresponds to how most people think about establishing pricing. With this

approach, we simply take the item’s cost and add a preset percentage of the

item’s cost, i.e., profit margin. Assume ABC Bike Wala can purchase a certain

type of bicycle for Rs 4,500 and utilizes a 50 percent markup based on cost.

Fifty percent of Rs 4,500 is (0.50) x 4,500 = Rs 2,250, thus putting this on

results in a selling price of Rs 4,500 + Rs 2,250 = Rs 6,750.

Finding the selling price in this

manner is not difficult, but we can make things much easier. A 50% markup

indicates that every Rs 1.00 of cost becomes Rs 1.00 + Rs 0.50 = Rs 1.50 of

selling price. As a result, a Rs 4,500 cost becomes a Rs 4,500 (Rs 1.50) = Rs

6,750 selling price. Using this reasoning helps us to discover the selling

price with less effort and will also pay off more handsomely in some of the

subsequent issues. This may be summed up in a FORMULA Markup Based on Cost:

**P = C (1 + r) **

where **P** represents the

SELLING PRICE,

**C** represents the COST

and **r **represents the PERCENT

MARKUP

**Finding cost and/or**

Rupee amount markup

Rupee amount markup

If we know the selling price and the

markup percentage, we can work backward to get the cost. This is demonstrated

in the following example. Assume the price of Dal Mash in Karachi is Rs 114/KG.

The cost-based markup is 6.5 percent. Determine (a) the cost of Dal Mash and

(b) the markup in the Rupee term.

(a)

Working

from our formula, we get: P = C (1 + r)

Rs 114 = C

(1.065)

C = Rs

107.04/KG

(b)

To

find the dollar amount of the markup we can subtract Rs 114 – Rs 107.04 to get

Rs 6.96. We could also have got this by multiplying (0.065) (Rs 107.04) = Rs

6.96.

**A word of caution **

When utilizing percentages, we must

be mindful about what the percentage is *of*. The 6.5 percent markup, in

this case, was calculated as a percentage *of* the cost, not the selling

price. It is easy to miss this and calculate the markup by calculating (0.065)

(Rs 114) = Rs 7.41, which is wrong. In reality, this would overestimate the

markup by Rs 0.45! When performing these kinds of computations, it is critical

to ensure that you are applying the % to the correct object.

**Regulatory
pricing**

The Karachi division of the Office of the Commissioner maintains a website with regulation pricing for everyday

necessities like groceries, fruits, meat, milk, poultry, vegetables, and

bakeries. For example, the wholesale market list price of Dal Mash (A-category)

is Rs 117/KG, whereas the retail market price is Rs 124/KG. By modifying the

markup formula P = C (1+r), we may obtain the markup percentage r = (P/C) – 1.

The main advantage of calculating

the markup in percentage is that you can easily evaluate the range, for

example, groceries prices range between 5.3 percent and 6.5 percent, so instead

of memorizing the wholesale prices and retail price long list, it is quite

handy to remember that they range between 5.3 percent and 6.5 percent and if

anyone charging more than 6.5 percent, you can report to the Commissioner

office.

I hope that financial analysis of regulatory pricing will assist you in acting logically while purchasing daily consumables.