Enter the gross profit ($) and the total sales ($) into the Profitability Ratio Calculator. The calculator will evaluate and display the Profitability Ratio.

- All Ratio Calculators
- Hedge Ratio Calculator
- Plowback Ratio Calculator
- Return on Investment Ratio Calculator

## Profitability Ratio Formula

The following formula is used to calculate the Profitability Ratio.

PROFR = GP / S * 100

- Where PROFR is the Profitability Ratio (%)
- GP is the gross profit ($)
- S is the total sales ($)

To calculate the profitability ratio, divide the gross profit by the total sales.

## How to Calculate Profitability Ratio?

The following example problems outline how to calculate Profitability Ratio.

Example Problem #1:

- First, determine the gross profit ($).
- The gross profit ($) is given as: 20,000.

- Next, determine the total sales ($).
- The total sales ($) is provided as: 100,000.

- Finally, calculate the Profitability Ratio using the equation above:

PROFR = GP / S * 100

The values given above are inserted into the equation below and the solution is calculated:

PROFR = 20,000 / 100,000 * 100 = 20 (%)

Example Problem #2:** **

For this problem, the variables required are provided below:

gross profit ($) = 60,000

total sales ($) = 200,000

Test your knowledge using the equation and check your answer with the calculator above.

PROFR = GP / S * 100** = ?**