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How to Calculate Gross Profit Margin.
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How to Calculate Gross Profit Margin.

Rosemary Njeri

The gross profit margin is a financial measure used to determine the financial health of a company.

Gross profit margin is frequently expressed as a percentage of sales.

Formula to calculate gross profit margin.

Calculate Gross Profit Margin.

Gross profit is the difference between the total revenue and the cost of goods sold.

Example:

A firm’s gross profit of the year was $400,000. The value of the total sales was $ 1,000,000. Determine the firm’s gross profit margin.

Calculate Gross Profit Margin.

Thu, the gross profit margin is 40%.

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