How to calculate gross profit margin?
Posted: Tue Jan 07, 2025 4:12 am
There are different formulas that allow you to calculate the gross margin , this will depend on the data you want to obtain as input for your decisions.
The formulas to obtain this profit margin are basically 3:
Gross margin
Gross margin as a percentage of sales
Gross margin for a special product
We explain each one in detail.
1. Gross margin formula
It consists of subtracting the cost of the products or services sold from the income you obtained from the total amount you sold. That is, the formula would be:
Gross margin = Sales – Cost of products or services sold
2. Gross margin formula as a bosnia and herzegovina phone data percentage of sales
As we saw before, the gross margin is calculated as a percentage. In this case, the formula will be:
Gross margin % = (Sales – Cost of products or services sold) / Sales x 100
3. Gross margin formula for a particular product
Here you will be able to analyze a good or service in detail. So, the formula you will use will be:
Gross margin per unit = Product sales price – Product unit cost
Gross profit margin formula
We say then that the calculation of the gross margin includes, on the one hand, the gross income. The gross income is made up of all the money that comes into your business from the sale of products and services, minus the direct costs.
Remember that indirect costs are not involved here. You only have to consider the direct costs of production (raw materials, shipping, etc.).
Once you divide the gross income by sales, you must multiply what you get by 100 to arrive at the famous percentage. This figure will represent the proportion of income that is a profit in your business.
In itself, the gross profit margin in percentage formula for your business would be.
The formulas to obtain this profit margin are basically 3:
Gross margin
Gross margin as a percentage of sales
Gross margin for a special product
We explain each one in detail.
1. Gross margin formula
It consists of subtracting the cost of the products or services sold from the income you obtained from the total amount you sold. That is, the formula would be:
Gross margin = Sales – Cost of products or services sold
2. Gross margin formula as a bosnia and herzegovina phone data percentage of sales
As we saw before, the gross margin is calculated as a percentage. In this case, the formula will be:
Gross margin % = (Sales – Cost of products or services sold) / Sales x 100
3. Gross margin formula for a particular product
Here you will be able to analyze a good or service in detail. So, the formula you will use will be:
Gross margin per unit = Product sales price – Product unit cost
Gross profit margin formula
We say then that the calculation of the gross margin includes, on the one hand, the gross income. The gross income is made up of all the money that comes into your business from the sale of products and services, minus the direct costs.
Remember that indirect costs are not involved here. You only have to consider the direct costs of production (raw materials, shipping, etc.).
Once you divide the gross income by sales, you must multiply what you get by 100 to arrive at the famous percentage. This figure will represent the proportion of income that is a profit in your business.
In itself, the gross profit margin in percentage formula for your business would be.