The Gross Profit Margin calculator computes the percent profit realized based on the cost of goods sold and the net sales.
INSTRUCTIONS: Choose units and enter the following:
- (CGS) Cost of Goods Sold
- (NS) Net Sales
Gross Profit Margin (GPM): The calculator returns the margin as a percent of sales.
The Math / Science
[Accounting| Profitability| FInancial] 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. If the company provides services instead of products then the "cost of revenue or direct expenses" is substituted for the "cost of goods sold" and the ratio calculated in the same way. Gross Profit Margin gives good information on the pricing policy and mark up practices of a given company. Gross Profit Margin changes dramatically from industry to industry.
Input Variables:
COGS- Cost of goods sold (Add up the expenses associated with selling your business's products to generate a value for the cost of goods sold (or "COGS")).
S- Sales or net sales
Output Variables:
returns the gross profit margin
Retail Calculator
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- Asset(/Stock) to Sales Ratio is used to compare how much in assets a company has relative to the amount of revenues the company can generate using their assets.
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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.
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- 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.