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This article was co-written by Michael R. Lewis. Michael R. Lewis is a retired Texas executive, entrepreneur and investment advisor. He has over 40 years of experience in Business & Finance, including the position of Vice President of Blue Cross Blue Shield of Texas. He holds a BBA in Industrial Management from the University of Texas at Austin.
This article has been viewed 98,545 times.
Gross profit margin is a fairly simple comparison between the cost of goods your company sells and the income from these products. Gross profit margin is the ratio of gross profit to total sales expressed as a percentage. It is a quick and useful way to compare your company with your competitors or the industry average. It can also be used to compare your company’s current state with past performance, especially in a market where the value of your merchandise can fluctuate significantly.
Steps
Calculate gross profit margin
Understanding the terms
- It’s best to compare companies in the same industry. Some goods and services have lower average profit margins than others.
This article was co-written by Michael R. Lewis. Michael R. Lewis is a retired Texas executive, entrepreneur and investment advisor. He has over 40 years of experience in Business & Finance, including the position of Vice President of Blue Cross Blue Shield of Texas. He holds a BBA in Industrial Management from the University of Texas at Austin.
This article has been viewed 98,545 times.
Gross profit margin is a fairly simple comparison between the cost of goods your company sells and the income from these products. Gross profit margin is the ratio of gross profit to total sales expressed as a percentage. It is a quick and useful way to compare your company with your competitors or the industry average. It can also be used to compare your company’s current state with past performance, especially in a market where the value of your merchandise can fluctuate significantly.
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