The Percent of Gross Profit calculator compute the percent of profit based on the net sales and the cost of goods or services.
INSTRUCTIONS: Choose units and enter the following:
- (NS) This is the Net Sales
- (CG) This is the Cost of Goods
Percent of Gross Profit (GP%): The calculator returns the percentage.
The Math / Science
The gross profit percentage is the difference between the net sales and the cost of goods sold (or services rendered) divided by the net sales times a hundred.
EXAMPLE
ZeTech Inc. has sales of $800,000, direct material costs of $200,000, direct labor costs of $75,000, and $25,000 of factory overhead. This results in a gross margin percentage of 62.5%, which is calculated as: ($800000 - ($200,000+$75,000+$25,000) / $800,000) * 100
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- Break-Even Analysis equation shows the point in business where the sales equal the expenses.
- Cost of Goods Sold is simply the difference between the cost of goods available for sale and the ending inventory.
- Gross Profit is the difference between the net sales (or revenue) and the cost of goods or services sold. It is also known as the gross margin or Sales profit.
- Gross Profit Percentage is the difference between the net sales and the cost of goods sold (or services rendered) divided by the net sales times a hundred.
- Gross Profit Margin measures how much of each sales dollar is used to finance the direct inputs required to manufacture or merchandise the product sold.
- Gross Margin Ratio equation is used to compute the profitability of a company on selling its inventory or merchandise.
- Gross Margin Return on Investment [GMROI] calculation can be used to measure the performance the entire shop, but it is more effective if used for a particular department or category of merchandise.
- Inventory Turnover Ratio reveals how many times inventory turns over (is sold and replaced) in a period.
- Initial Markup % is the comparison of the amount of money, expressed as a percentage of initial cost, that a retailer adds to the price of goods.
- Maintained Markup reveals the impact of markdowns (reductions) on the Initial Markup.
- Maintained Markup Percentage is the percentage of net sales.
- Markup is the difference between cost of a good or service and its selling price.
- Net Sales is the sales revenue less sales returns and allowances and sales discounts.
- Open-To-Buy is the difference between how much inventory is needed and how much is actually available.
- Reductions are the combined cost of making a specified product/service cheaper or less in amount.
- Retail Price is the price at which the manufacturer recommends that the retailer sell the product.
- Sales per Square Foot is most commonly used for planning inventory purchases.
- Sell-Through Rate/Analysis is the selling activity of a product within a defined period of time.
- Total Stock Return is the appreciation in the price plus any dividends paid, divided by the original price of the stock.