Gross Margin vs Gross Profit | What is the Difference?
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- เผยแพร่เมื่อ 17 ส.ค. 2021
- Gross Margin & Gross Profit Having Your Confused? If you have been wondering what the difference is between gross profit and gross margin then let’s take a look at why so many people get confused by these two terms. We will look at how to calculate the gross margin and the gross profit on both the business’s total sales as well as each product or service.
Gross Margin and Gross Profit do not need to be difficult as they are both easy to figure out. All you need are the sales and costs of goods sold.
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What’s my problem- gross margin for the sales price of $8.88 and COGS of $4.25 is 52% not 47.8%?
(8.88-4.25) / 8.88
You are correct. GM% should be (Sales - COGS)/Sales . The COGS % is 47.8 and GM is 52.1%. Ugg, accidental transposing. thanks for pointing this out
@@BadassBusinessOwners gotta delete the video. this made me go crazy last night as I was studying
You should remake thos video with the correct formula. Your videos are so good! You're a great teacher!!! I really love learning from you.
Ah, thanks! Glad they are helpful! I'll keep updating them an improving them. :-). Tammy
What if you had these micro categories in the P&L statements :
- difference from eliminations
- gains from disposal of PP&E
- losses fr disposal of PPE
- offset segments (tech.)
To which macro categories would these belong ? COG or Expense ?
*_Remember: Gross Profit & Gross Margin are indicators of what money is left for expenses & profits! - Tammy_*
thanks for the videos
Glad they help! :-). Tammy
What is standard margin?
Standard margin typically includes your operational costs. Some folks will have you bundle all costs and expenses together.
Hello, I got confused. I thought Gross Profit Margin= (Sales- COGS)/ Sales
right?
Your formula says that its
Gross Profit Margin=COGS/ Sales? Sorry can you please explain what you meant, and why to me that seems wrong.
@@Amadeadraws You are correct. The COGS % is 47.8 and GM is 52.1%. Ugg, accidental transposing. thanks for pointing this out. GM% should be (Sales - COGS)/Sales
100%-45% = 65 % 😮 not 55?????
Good morning. It is 55%. 45 + 55 = 100. 65 + 45 = 110. I have other videos where I messed up, LOL, so I always welcome when folks find stuff. :-). - tammy