Gross profit calculation
Gross profit = Revenue - Cost of sales
The Gross Profit Margin = Gross Profit/Revenue*100 regardless of weather the Gross Profit is positive or negative (a loss). Therefor, it is acceptable to have a negative Gross Profit Margin.
Gross Profit/Net Sales = Gross Profit Margin.
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Gross Profit = Sales - Cost of goods sold Gross profit margin = gross profit / Sales
When we speak of margin we are referring to the fact that we are comparing the profit as a fraction of net sales (Turnover). It is usually referred to as the gross profit margin and one must not confuse this with gross profit mark-up which is expressing gross profit as a percentage of the cost price of goods sold. Naturally the average is the result that we achieve when we compare the gross profit for one year with the Turnover of the same year and express it as a percentage.
Gross Profit Margin = Gross Profit/Revenues Net Profit Margin = Net Profit/Revenues
Sales (or revenue, it's the same thing) - cost of goods sold= Gross Profit
gross margin ratio is calculated as >GROSS PROFIT/NET SALES
The gross margin formula is gross profit divided by revenue. The gross profit and revenue amounts can be found by looking at a companies income statement.
Net Income = Sales - Gross profit Gross Profit - Cost of Production = Net Income
The Gross Profit Margin is an expression of the Gross Profit as a percentage of Revenue. Gross Profit Margin = Gross Profit/Revenue*100 [or] Gross Profit Margin = Revenue - (Cost of Sales)/Revenue*100 Cost of sales=it include all those expenses and income that will occur during manaufacturing and sales of goods and services
Add all the money you earned. Plus the capital. You got the gross.