gross profit is to be divided in which ratio
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˙❥˙The formula for calculating the gross profit ratio is: gross profit divided by net sales x 100. The gross profit is the cost of goods sold minus the total net sales figure.✧*。
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- The gross profit ratio (GP ratio) is a financial ratio that divides a company's gross profit figure by its total net sales to determine its performance and efficiency.
- The gross profit ratio can also be expressed as a percentage by multiplying the resulting figure by 100.
- Divide the gross profit by the net sales to get the gross profit ratio.
- To make the result easier to read and compare, it is usually multiplied by 100 and expressed as a percentage.
- This allows you to calculate the profit percentage of the company's revenue.
- The gross profit margin formula, Gross Profit Margin = (Revenue - Cost of Goods Sold) / Revenue x 100, calculates the percentage of revenue you keep after deducting all costs from each sale.
- It is used to assess a company's ability to generate revenue while keeping expenses low.
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