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Gross margin is the dollar profit divided by sell price. So, (sale price - purchase price)/(sale price). You may be thinking of markup, which is the profit dol
by mediaman 14y ago
Gross margin is the dollar profit divided by sell price. So, (sale price - purchase price)/(sale price).
You may be thinking of markup, which is the profit dollars as percentage of cost, and is often used in retail.
A 100% markup results in a 50% gross margin.
- hessenwolf 14y agoDollar profit is a bit misleading. Gross margin is the formula you give, but not taking into account operating costs.