In addition to those mentioned before, they searched for profit calculator, profit margin formula, how to calculate profit, gross profit calculator (or just gp calculator) and even sales margin formula. Most of the time people come here from Google after having searched for different keywords. So the difference is completely irrelevant for the purpose of our calculations - it doesn't matter in this case if costs include marketing or transport. This tool will work as gross margin calculator or a profit margin calculator. Luckily, it's likely that you already know what you need and how to treat this data. To us, what's more important is what these terms mean to most people, and for this simple calculation the differences don't really matter. In this calculator, we are using these terms interchangeably and forgive us if they're not in line with some definitions. For example, costs may or may not include expenses other than COGS - usually, they don't. In reality, it will probably be less due to connection. The materials per hour column is based upon performing the ideal 3,000 disassembly actions per hour. Now that you know how to calculate profit margin, here's the formula for revenue: r e v e n u e = 100 ⋅ p r o f i t / m a r g i n revenue = 100 \cdot profit / margin re v e n u e = 100 ⋅ p ro f i t / ma r g in.Īnd finally, to calculate how much you can pay for an item, given your margin and revenue (or profit), do: c o s t s = r e v e n u e − m a r g i n ⋅ r e v e n u e / 100 costs = revenue - margin \cdot revenue / 100 cos t s = re v e n u e − ma r g in ⋅ re v e n u e /100Īll the terms (margin, profit margin, gross margin, gross profit margin) are a bit blurry and everyone uses them in slightly different contexts. For example, if an item has an average number of 0.13, you should expect that you'll get 13 materials in 10,000 disassembles (0.13 per 100 disassembles, 0.0013 per disassemble) on average. The profit equation is: p r o f i t = r e v e n u e − c o s t s profit = revenue - costs p ro f i t = re v e n u e − cos t s, so an alternative margin formula is: m a r g i n = 100 ⋅ ( r e v e n u e − c o s t s ) / r e v e n u e margin = 100 \cdot (revenue - costs) / revenue ma r g in = 100 ⋅ ( re v e n u e − cos t s ) / re v e n u e.
The formula for gross margin percentage is as follows: g r o s s m a r g i n = 100 ⋅ p r o f i t / r e v e n u e gross~margin = 100 \cdot profit / revenue g ross ma r g in = 100 ⋅ p ro f i t / re v e n u e (when expressed as a percentage).
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