Gross Profit & Net Profit as a percentage of sales Ratios

Gross Profit as a percentage of sales

Sales revenue does not tell the total picture of performance. The sales revenue of a business may significantly increase with only marginal increase in actual gross profit. Gross profit as a percentage of sales provides information on the profitability of sales; that is the gross profit per $100 of sales.

The formula is:

Net profit as a percentage of sales

Net profit as a percentage of sales provides information on the profitability of sales; that is the net profit per $100 of sales.

The formula is:

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