Describe Gross Profit Percentage.
Gross profit percentage signifies the amount of profit from the sales income expressed in terms of percentage.
Answer: Gross Profit Percentage = (Gross Profit / Total Sales) × 100 %
Let's understand more about Gross Profit Percentage
Gross profit is the amount of total revenue minus the cost of goods sold. It is the amount of profit before all interest and tax payments. It is also known as gross margin. Gross profit does not include indirect incomes and expenses. In other words, it is the profit purely from the trading activities of a firm.
Gross Profit is expressed as,
Gross Profit = Total Revenue - Cost of goods sold
Gross Profit Percentage is given by,
Gross Profit Percentage = (Gross Profit / Total Sales) × 100 %
Thus, Gross Profit Percentage = (Gross Profit / Total Sales) × 100 %