> For the complete documentation index, see [llms.txt](https://docs.flowretail.com/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.flowretail.com/docs/day-to-day-operations/prices/calculation-factor.md).
# Calculation factor
## What is the calculation factor
In Flow Retail, you can define a calculation factor to help automatically suggest a sales price based on the product’s cost price and desired gross margin.
The calculation factor is based on gross margin multiplier, not markup percentage.
### Example
* A calculation factor of 2.5 means you want a gross margin of 60% (because 100 / 2.5 = 40; cost is 40% of the sales price)
#### Let’s say:
* Cost price = 100
* Calculation factor = 2.5
#### Flow Retail will calculate:
Suggested sales price = 100 × 2.5 = 250
This means that for every unit sold at 250, the cost is 100 and your gross profit is 150 — giving you a gross margin of **60%**.
### Summary
* **Cost price × Calculation factor = Suggested sales price**
* Helps you price consistently based on your margin goals
* Particularly useful when importing or adjusting large product catalogs
## Setting the calculation factor
To set a calculation factor for a product, create a product with the following settings:
1. **Type:** Not stock controller
2. **Markup Factor:** The factor you want to apply, for example 1.25 to set the profit margin to 0, if there is a 25% VAT on the product.
{% hint style="warning" %}
VAT must be included in the calculation. For example, if the item has 25% VAT and the factor is set to **1.25**, the profit margin will be 0.
{% endhint %}
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