Gross profit margin is the percentage of gross profit and sales income (or operating income), in which gross profit is the difference between income and operating cost corresponding to income, which is expressed by the formula: gross profit = gross profit/operating income × 100%= (main business income-main business cost)/main business income × 100%. [ 1]
Constitutionally speaking, gross profit is the difference between income and operating costs, but in fact this understanding confuses the concept of gross profit margin. In fact, the gross profit margin reflects the increased value of a commodity after its production is transformed into an internal system. In other words, the more value added, the more gross profit. For example, through the differentiated design of R&D, the product has added some functions compared with competitors, and the marginal price increase is positive, so the gross profit has also increased.
computing formula
1. Gross profit margin = (sales revenue-sales cost)/sales revenue × 100%= (price excluding tax-purchase price excluding tax)/price excluding tax × 100%.
2. Gross profit margin =( 1- purchase price excluding tax/sale price excluding tax) × 100%
Comprehensive gross profit margin and net asset interest rate are the ratio of net profit divided by average total assets.
The calculation formula of comprehensive gross profit margin is: net profit rate of assets = (net profit/average total assets) × 100%= (net profit/sales revenue )× (sales revenue/average total assets) = net profit rate of sales × asset turnover rate. The net interest rate of assets reflects the comprehensive effect of enterprise's asset utilization, which can be decomposed into the product of net interest rate and asset turnover rate, so that we can analyze what causes the increase or decrease of net interest rate of assets.
Gross profit margin = (sales revenue-cost of sales)/sales revenue × 100%
Calculation of gross profit
Gross profit and income in the calculation of gross profit margin usually refer to gross profit and income divided in a certain way in a certain period, corresponding to a certain division and a certain period. When calculating gross profit margin, the calculation caliber of income and cost is the same as that in accounting. For industrial and commercial enterprises, income refers to income excluding VAT output tax, while for construction enterprises, income includes tax. It is particularly important to note that the cost of commercial general taxpayer enterprises is calculated and determined according to the unit price excluding input tax.