Gross Profit Margin Calculator Results
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Your calculator results are as follows:
| Sales: | £ |
| Cost of goods sold : | £ |
| Your gross profit margin ratio is: | 0.00:1 |
| Your gross profit margin percentage is: | 0% |
Back to Gross Profit Margin Calculator
What the results mean
A gross profit margin of 0.33:1 means that for every pound in sales, you have 33 pence to cover your basic operating costs and profit.
Some business owners will use an anticipated gross profit margin to help them price their products. While other factors - such as competition and demand - may play into pricing decisions, a gross profit margin is a good starting point for product pricing. For example, if a product costs £8 to produce, and your gross profit margin is 20 percent, you can calculate your pricing by dividing your cost by (1-.0.2). In this case, £8.00 divided by .8 would yield a price of £10.00.
You can also use your gross profit margin ratio to help you set and monitor sales goals for your company.
Because costs for raw materials, labour and manufacturing expenses all play into your profit margin ratio, a change in this ratio over time could mean it's time to look for new suppliers or review your pricing structure.
Should you have any queries regarding your company's finances - Money Advice Direct has a very effective, workable and legal answer - call us now on:
FREEPHONE 0800
074 6918
or Email us at: info@insolvencyhelpline.co.uk
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