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## What is meant by gross profit margin?

The meaning of gross profit is simple as these words mean that they are the total revenue of a company which is minus the cost of goods that have been sold so far. In other words, gross profit can be stated to be the profit which an organization makes. Moreover, this gross profit is said to be the profit made by a company only when the costs related to the making as well as selling of the products have been deducted or even when the costs associated with the offering of the services are deducted.

## Gross Profit Margin Calculator

## Things involved in gross profit

If we come down to the point of breaking the gross profit or the various aspects of gross profit will be the assessment of the organization’s efficiency at the way they use not only the supplies but also the labour. Another important point to be remembered is that one can never mix the gross profit to be similar with the operating profit. The plain reason is that this operating profit means the earnings which are calculated before the time, interest as well as the tax have been deducted.

## What is the use of gross profit? And what is gross profit margin?

The best part of this gross profit is that an individual will be able to calculate gross profit margin with the help of gross profit & the expression used to denote gross profit is percentage. Besides this, the gross profit margin turns out to be one of the important sources when the profitability is to be measured. As with this measurement, not only the analysts but also the investors will be in a position to compare the other similar companies along with the companies as far as the overall industry is concerned.

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This metric is moreover, an indication of the financial success apart from the viability of a said service or any other product. When the percentage goes up, the company is also able to retain the money. Hence in other words, we can state that the gross profit margin calculator will assist in measuring a company’s both manufacturing & distribution efficiency when the production process is being carried out. This is also said to be the profitability of the core activity.

### What is the formula to calculate the gross profit margin calculator?

To help you with the calculation of the gross profit margin calculator, one can go ahead & make use of the formula mentioned below as this is the formula which is put in to use when the gross profit manual calculation is concerned.

\(gross\, profit\, margin\,=\,\frac{\,net\, sales\,-\, cost\, of\, the\, goods\, sold\,}{net\, sales} \times 100\)

## How to use gross profit margin calculator?

If you are looking forward to use the gross profit margin calculator, then the following steps will guide you to get to your destination. Firstly, one will be required to fill the fields such as the net sales & the cost of the goods sold & then click on calculate to know the gross profit margin percentage.