Profit Margins/Math question - GoFuckYourself.com

selena · 02-29-2008, 08:40 AM

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?

baddog · 02-29-2008, 10:57 AM

Gross Profit Margin can be calculated by dividing gross profit by total revenue.

slapass · 02-29-2008, 11:03 AM

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.

selena · 02-29-2008, 11:28 AM

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!

Rednax · 02-29-2008, 11:44 AM

[(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%

02-29-2008, 08:40 AM	#1
selena Confirmed User Join Date: Aug 2004 Location: On The Edge Posts: 7,994	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

02-29-2008, 11:28 AM	#4
selena Confirmed User Join Date: Aug 2004 Location: On The Edge Posts: 7,994	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! __________________ ~ Doer of Things at MetArtMoney Where Flawless Beauty Meets Art ~The MetArt Network ~ selena.delgado9 Last edited by selena; 02-29-2008 at 11:30 AM..

02-29-2008, 10:57 AM	#2
baddog So Fucking Banned Industry Role: Join Date: Apr 2001 Location: the beach, SoCal Posts: 107,089	Gross Profit Margin can be calculated by dividing gross profit by total revenue.

02-29-2008, 11:03 AM	#3
slapass Too lazy to set a custom title Join Date: Nov 2002 Location: Earth Posts: 14,622	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.

02-29-2008, 11:44 AM	#5
Rednax Confirmed User Join Date: Dec 2005 Posts: 162	[(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%