The formula to calculate Gross Profit Margin (GPM) is:
\[ GPM = \frac{R - COGS}{R} \]
Where:
Gross Profit Margin is the total gross profit compared to your net sales.
Revenue is the income that a business has from its normal business activities, generally from the sale of goods and services to customers.
The Cost of Goods Sold is the direct costs attributable to the production of the goods sold by a company.
Let's assume the following values:
Using the formula:
\[ GPM = \frac{R - COGS}{R} \]
Evaluating:
\[ GPM = \frac{780000 - 40000}{780000} \]
The Gross Profit Margin is 0.948717948717949.
| Revenue (R) | Cost of Goods Sold (COGS) | Gross Profit Margin (GPM) |
|---|---|---|
| 750000 | 35000 | 0.953333333333333 |
| 750000 | 40000 | 0.946666666666667 |
| 750000 | 45000 | 0.940000000000000 |
| 755000 | 35000 | 0.953642384105960 |
| 755000 | 40000 | 0.947019867549669 |
| 755000 | 45000 | 0.940397350993378 |
| 760000 | 35000 | 0.953947368421053 |
| 760000 | 40000 | 0.947368421052632 |
| 760000 | 45000 | 0.940789473684211 |
| 765000 | 35000 | 0.954248366013072 |
| 765000 | 40000 | 0.947712418300654 |
| 765000 | 45000 | 0.941176470588235 |
| 770000 | 35000 | 0.954545454545455 |
| 770000 | 40000 | 0.948051948051948 |
| 770000 | 45000 | 0.941558441558442 |
| 775000 | 35000 | 0.954838709677419 |
| 775000 | 40000 | 0.948387096774194 |
| 775000 | 45000 | 0.941935483870968 |
| 780000 | 35000 | 0.955128205128205 |
| 780000 | 40000 | 0.948717948717949 |
| 780000 | 45000 | 0.942307692307692 |
| 785000 | 35000 | 0.955414012738854 |
| 785000 | 40000 | 0.949044585987261 |
| 785000 | 45000 | 0.942675159235669 |
| 790000 | 35000 | 0.955696202531646 |
| 790000 | 40000 | 0.949367088607595 |
| 790000 | 45000 | 0.943037974683544 |
| 795000 | 35000 | 0.955974842767296 |
| 795000 | 40000 | 0.949685534591195 |
| 795000 | 45000 | 0.943396226415094 |
| 800000 | 35000 | 0.956250000000000 |
| 800000 | 40000 | 0.950000000000000 |
| 800000 | 45000 | 0.943750000000000 |