Gross Profit Margin calculator
Gross profit margin is a key financial indicator used to asses the profitability of a company's core activity, excluding fixed cost. Gross Profit Margin formula is:
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Interpretation of Gross Profit Margin
Gross profit margin measures company's manufacturing and distribution efficiency during the production process. It is a measurement of how much from each dollar of a company's revenue is available to cover overhead, other expenses and profits.
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Definitions and terms used in the Gross Profit Margin calculator
- Net Sales: the amount of revenue generated by a company after the deduction of returns, allowances for damaged or missing goods and any discounts allowed.
Net sales = Gross sales - Sales returns and allowances - Cost of Goods Sold (COGS): the direct cost attributable to the production or purchasing of the goods sold by a company. It is also referred as Cost of sales.
- Gross Profit: the difference between Net Sales and its Cost of Goods Sold, before deducting overhead, payroll, taxes, interest and other operating expenses.
Gross profit = Net sales - Cost of Goods Sold
Terms of use
1. Complementarily, in order to calculate the Gross Profit Margin for your business, we offer a calculator free of charge. However, we appreciate a donation if you value our tools and services.
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3. Although C. C. D. Consultants Inc.'s personnel has verified and validated the Gross Profit Margin calculator, C. C. D. Consultants Inc. is not responsible for any outcome derived from its use. The use of Gross Profit Margin calculator is the sole responsibility of the user and the outcome is not meant to be used for legal, tax, or investment advice.
