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. Three free calculators for different margin calculating purposes: product profit margin calculation, stock trading margin calculation, and currency exchange. Gross margin defined is Gross Profit/Sales Price. All items needed to calculate the gross margin percentage are found on the income statement. Download Free Whitepaper Today! Home Accounting Payroll About Login. By Investopedia Updated April 3, — 5: Business premises and location. Information technology IT for business. Markups are different than margins. Learn about the operating profit casino chip collector, how it is calculated and what it says to both business owners and investors about Corporate finance Financial ratios Management accounting Profit. You might find VAT calculator and sales tax calculator convenient, too. Here is a worksheet you can use to track changes in this and other important measures. Margins and markups interact in a predictable way. Cost of sales also known as cost of goods sold or COGS includes variable costs and fixed costs directly linked to the sale, such as material costs, labor, supplier profit, shipping-in costs cost of getting the product to the point of sale, as opposed to shipping-out costs which are not included in COGS , etc. Get the HTML code. Before you start , Business planning , Market and customer research , Evaluating your business idea , Turning your idea into a business Most people find it easier to work with gross margin because it directly tells you how much of the sales revenue, or price, is profit. The percentage gross profit of the product v. Larger gross margins are generally considered ideal for most companies, with the exception of discount retailers who instead rely on operational efficiency and strategic financing to remain competitive with lower margins. A company's total sales revenue minus its cost of goods sold, It is not necessarily profit as other expenses such as sales, administrative, and financial must be deducted.