what is gross profit margin?

In General Area - Asked by sowadi c. - Dec 4, 2008
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Answer(s)

David G.
Broker/Agent
Sarasota, FL

The gross profit is most often the result of the COGS (cost of goods sold) from the revenue...before the expenses (operating cost) are calculated.
For example: The store owner buys a pair of shoes at wholesales for $25 and retails (sells) the shoes for $55 in his store. The difference between the retail price and the cost of goods is $30...That is the Gross Profit.
When you then add up all the "operating expenses": rent, employees, electricity these items are deducted from the Gross Profit to determine the Net Profit or also known as the NOI (net operating income).

Dec 6, 2008
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Chris C.
Broker/Agent
New York, NY

Gross profit margin = Revenues minus COGS / Revenues.

Jan 15, 2009
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