how is the profit margin computed

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Profit margin formulaGross Profit Margin = Gross Profit /Revenue x 100Operating Profit Margin = Operating Profit /Revenue x 100Net Profit Margin = Net Income /Revenue x 100. As you can see in the above example,the difference between gross vs net is quite large. …

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  • What is the formula for profit margin?

  • Profit margin formula 1 Gross Profit Margin = Gross Profit / Revenue x 100. 2 Operating Profit Margin = Operating Profit / Revenue x 100. 3 Net Profit Margin = Net Income / Revenue x 100. As you can see in the above example, the difference between gross vs net… More …

  • What is net profit margin?

  • What is Net Profit Margin? Net Profit Margin (also known as 鈥淧rofit Margin鈥?or 鈥淣et Profit Margin Ratio鈥? is a financial ratio used to calculate the percentage of profit a company produces from its total revenue. It measures the amount of net profit a company obtains per dollar of revenue gained.

  • What are the three types of profit margins?

  • When assessing the profitability of a company, there are three primary margin ratios to consider: gross, operating, and net. Below is a breakdown of each profit margin formula. Gross Profit Margin = Gross Profit / Revenue x 100. Operating Profit Margin = Operating Profit / Revenue x 100. Net Profit Margin = Net Income / Revenue x 100.

  • How do you calculate gross margin and net margin?

  • Based on the above income statement figures, the answers are: Gross margin is equal to $500k of gross profit divided by $700k of revenue, which equals 71.4%. Net margin is $100k of net income divided by $700k of revenue, which equals 14.3%.

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