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1. Re: how to calculate Gross profit and GP Ratio?
Don Wise Nov 27, 2018 10:06 AM (in response to visakha chan)1 of 1 people found this helpfulHello Visakha,
GROSS PROFIT: Sales - Cost of Goods Sold = Gross Profit
So a sample calculation for Gross Profit would be SUM([Sales]) - SUM([Cost of Goods Sold])
What makes up Cost of Goods Sold? You'll need to decide which if (or all) any of the following make up that amount:
Variable costs include:
Materials used
Direct labor
Packaging
Freight
Plant supervisor salaries
Utilities for a plant or a warehouse
Depreciation expense on production equipment
Machinery
Fixed costs generally are more static in nature. They include:
Office expenses such as supplies, utilities, a telephone for the office, etc.
Salaries and wages of office staff, salespeople, officers and owners
Payroll taxes and employee benefits
Advertising, promotional and other sales expenses
Insurance
Auto expenses for salespeople
Professional fees
Rent
GROSS PROFIT MARGIN (RATIO): Gross Profit / Sales = Gross Profit Margin
So a sample calculation for Gross Profit Margin would be (use previous Gross Profit calculation): [Gross Profit] / SUM([Sales]) and format as a % Percentage if desired or leave as decimal.
Hope that helps! Thx, Don
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2. Re: how to calculate Gross profit and GP Ratio?
visakha chan Nov 27, 2018 10:29 AM (in response to Don Wise)Thank you very much. Don Wise
My data sources only have Purchase and Sale. and the professor asked for GP ratio between 2 products.
So I assume GP = Total Sale - Total Purchase. Can it be ?
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3. Re: how to calculate Gross profit and GP Ratio?
Don Wise Nov 27, 2018 10:32 AM (in response to visakha chan)Hi Visakha,
I have no idea!
I can only point you in the right direction. You'll need to decide whether your data matches what I've provided. I don't have access to your data so cannot definitively tell you one way or the other. Thx! Don