Select the value to solve for, then enter the two requested values. Use net sales and gross profit or COGS for the same accounting period and currency.
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Gross Profit Rate Formula
The following formula is used to calculate a gross profit rate.
- Where GPR is the gross profit rate (%)
- GP is the gross profit ($)
- S is the total net sales ($)
To calculate a gross profit rate, divide the gross profit by the total net sales, then multiply by 100.
Gross Profit Rate Definition
A gross profit rate is a measure of the ratio of gross profit to total net sales displayed as a percentage.
Gross Profit Rate Example
How to calculate gross profit ratio?
- First, determine the gross profit.
Calculate or measure the total gross profit of the business being analyzed.
- Next, determine the total net sales.
Determine the total net sales during the same time period.
- Finally, calculate the gross profit rate.
Plug the values from steps 1 and 2 into the calculator to determine the gross profit rate (%).
FAQ
A gross profit rate, also known as gross profit ratio, is the ratio of total gross profit to total net sales (revenue), expressed as a percentage.
Gross profit is net sales minus cost of goods sold (COGS), before operating expenses, interest, and taxes.
