# How to Calculate Gross Profit Margin Percentage

How to Calculate Gross Profit Margin Percentage
For
business gurus, check out this. The gross profit margin expresses your profits
as a percentage of the total sales revenues generated. This percentage allows
you to compare the profits of businesses of various sizes because the results
are measured as a percentage rather than in raw numbers. However, because
different industries have different norms, gross profit margin is hard to
compare between companies in different sectors. To calculate the gross profit
margin as a percent, you need to know the revenues and the cost of the goods
sold.
Step 1
Subtract the total costs of your goods from the revenues the sales
generate to find your gross profit. For example, if you purchase #100,000 of
goods and sell them for #120,000, you would subtract #100,000 from  #120,000 to get a profit of #20,000
Step 2
example, you would divide #20,000 by #120,000 to get 0.17
Step 3
Multiply the result from Step 2 above by 100 to find the gross
you would be to simply  multiply 0.17 by
100 to find that your gross profit margin which
equals 16.7% percent.

## Calculator Use

Calculate the gross margin percentage, mark up percentage and
gross profit of a sale from the cost and revenue, or selling price, of an item.
* Revenue = Selling Price

### Margin Formulas/Calculations:

• The gross profit P is the difference
between the cost to make a product C and the selling price or revenue R.
• P = R – C
• The mark up percentage M is the profit P
divided by the cost C to make the product.
• M = P / C = ( R – C ) / C
• The gross margin percentage G is the
profit P divided by the selling price or revenue R.
• G = P / R = ( R – C ) / R