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