The Student Room Group
Uni students - Complete our survey >>
Uni students - Complete our survey >>
Uni students - Complete our survey >>

Gross profit margin

Gross profit = £1,000
Turnover = £2,000

Gross profit percentage = Gross profit/ Turnover * 100

£1,000/£2,000 x 100 = 50%

What does this percentage mean? for every £1, the business makes 50p?
Original post by R1C3W1N3
Gross profit = £1,000
Turnover = £2,000

Gross profit percentage = Gross profit/ Turnover * 100

£1,000/£2,000 x 100 = 50%

What does this percentage mean? for every £1, the business makes 50p?


for every £1 of revenue 50p is gross profit.
Reply 2
Avatar for R1C3W1N3
R1C3W1N3
OP
12
Original post by dan94adibi
for every £1 of revenue 50p is gross profit.


Hello again! :smile:

Okay, sorry just overwhelmed with all the definitions I have to learn, but basically a business makes £2000, after all the COGS have been taken from the figure we're left with £1000 as GP
We've made £2000 but it's cost us £1000 to make that?

I see you've replied to my stocks question aswel (thanks a lot for your help)
http://ycharts.com/companies/AAPL/gross_profit_margin I've googled Apple's GP Margin... on the graph their current figure for GP is 38.63%

Every dollar Apple spends they recieve 38.63 dollars as GP?
Original post by R1C3W1N3
Hello again! :smile:

Okay, sorry just overwhelmed with all the definitions I have to learn, but basically a business makes £2000, after all the COGS have been taken from the figure we're left with £1000 as GP
We've made £2000 but it's cost us £1000 to make that?

I see you've replied to my stocks question aswel (thanks a lot for your help)
http://ycharts.com/companies/AAPL/gross_profit_margin I've googled Apple's GP Margin... on the graph their current figure for GP is 38.63%

Every dollar Apple spends they recieve 38.63 dollars as GP?


No, Its every $100 they receive from sales they will earn $38.63 gross profit (gross profit = Revenue - variable costs) Remember GP is not the final profit.

Quick Reply

Related discussions

Latest

Trending

Trending

Articles for you