Profit Margins/Math question

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  • selena
    Confirmed User
    • Aug 2004
    • 7995
    #1

    Profit Margins/Math question

    I'm trying to figure something out, and I don't know if I am doing it right.

    To determine profit marign, do you take your net and divide it by your gross?

    And how do you know what a good profit margin is?
    ~
    Doer of Things at
    MetArtMoney
    Where Flawless Beauty Meets Art
    ~The MetArt Network ~
    selena.delgado9
    Tags: None
    • baddog
      So Fucking Banned
      • Apr 2001
      • 107089
      #2
      Gross Profit Margin can be calculated by dividing gross profit by total revenue.

        Comment

        • slapass
          Too lazy to set a custom title
          • Nov 2002
          • 14625
          #3
          If she is doing gross profit margin isn't it gross sales - cost of goods divided by gross sales. Example if you sell a t shirt for 10 dollars and it cost you 6. (10-6)/10 = 40% profit margin and this would be gross profit margin.

            Comment

            • selena
              Confirmed User
              • Aug 2004
              • 7995
              #4
              I think what I'm trying to figure is net profit margin.

              But I am not sure, as the terms are starting to

              spinnnnnnnnnnnnn in my head...didn't sleep well last night.

              Using slapass's example, if I sold a tshirt for $10, and the shirt cost me $6, and I had to pay .50 to ship it and .25 for shipping materials, then what is the margin of profit after all expenses are subtracted.

              Thanks guys!
              Last edited by selena; 02-29-2008, 09:30 AM.
              ~
              Doer of Things at
              MetArtMoney
              Where Flawless Beauty Meets Art
              ~The MetArt Network ~
              selena.delgado9

                Comment

                • Rednax
                  Confirmed User
                  • Dec 2005
                  • 162
                  #5
                  [(Gross/Cost)-1]*100 = % ROI

                  Example... grossed $10, cost $6.75... 48% ROI (you spent $6.75 to make $3.25)

                  I suppose you're maybe not looking for ROI... margin of profit is $3.25?

                  Net profit/Revenue (3.25/10) = .325 *100 = 32.5%

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