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Gross Profit Percentage

Gross profit percentage tells us how much of sales income is gross profit. Gross profit is the sales amount of the cost of particular items that was sold. Profit will be gained whenever the selling price of one thing is greater than cost price.

Gross profit percentage is one of the way to evaluate financial performance of a person or company. It helps to see what percentage of their earning after costs is profit.

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Gross Profit Percentage Formula

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Formula to find gross profit percentage:

Gross Profit Percentage

Gross profit is calculated simply by subtracting the cost of goods from the net sales price.

Gross Profit = Net Sales Price - Cost of Goods.

How to Calculate Gross Profit Percentage

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To calculate Gross profit percentage, divide the Gross profit by the selling price in each category.To calculate each category's gross profit percentage, divide the average gross profit by the average selling price.

Steps for Calculating Gross Profit Percentage:

Step 1:
Figure out gross profit for each category of product.

Step 2:
Divide gross profit by selling price.


Solved Examples

Question 1: If the cost of a fan is 3.30 dollar and sold at 5.90 dollar. Find the gross profit percentage.

Solution:
 
Given
Cost Price of a fan = 3.30

and selling price = 5.90

Step 1: Find Gross Profit 

Gross Profit  = Sell Price - Cost Price

= 5.90 - 3.30

= 2.60

Step 2:


Gross Profit Percentage = $\frac{Gross  Profit}{Selling  Price}$

= $\frac{2.60}{5.90}$

= 0.44  or

= 0.44 * 100

= 44%
 

Question 2: Calculate gross profit ratio from the following particulars:

       
     Particulars        

      Sales      
 Opening Stock       
  Purchases       
 Closing Stock     
          
           $

 1,66,000    50,000
  90,000   20,000

Solution:
 
Cost of goods sold = Opening stock + Purchases - Closing stock

= 50,000 + 90,000 - 20,000

= 1,20,000

Gross profit = 1,66,000 - 1,20,000

= 46,000

Gross profit ratio = $\frac{Gross   Profit}{selling   Price}$ x 100

Gross profit ratio = $\frac{46,000}{1,66,000}$ x 100

= 27.71 %
 

Question 3: Stefen sold some particulars at 10,000 dollars. The cost price of that particulars is 5,000 dollars. Find the gross profit percentage.

Solution:
 
Given
Cost Price of particulars = 5,000

and selling price = 10,000

Step 1: Find Gross Profit 

Gross Profit  = Sell Price - Cost Price

= 10,000 - 5,000

= 5,000

Step 2:


Gross Profit Percentage = $\frac{Gross  Profit}{Selling  Price}$

= $\frac{5000}{10000}$ 

= 0.50  or

= 0.50 * 100

= 50 %
 

Question 4: Janina buy a car in 5,000 dollar and she sold it at 11,500 dollar. Find the gross profit percentage.
Solution:
 
Given
Cost Price of a car = 5000

and selling price = 11500

Step 1: Find Gross Profit 

Gross Profit  = Sell Price - Cost Price

= 11500 - 5000

= 6500

Step 2:


Gross Profit Percentage = $\frac{Gross  Profit}{Selling  Price}$

= $\frac{6500}{11500}$

= 0.56  or

= 0.56 * 100

= 56%
 

More topics in Gross Profit Percentage
Profit Average Cost Price
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