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?

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

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.

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! :)

[(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%