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Gross Profit Margin.
Member rating: No Rating | Words: | Submitted: Wed Oct 22 2003
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Gross Profit Margin Gross profit margin (GPM) is gross profit divided by sales turnover and is expressed as a percentage = Gross Profit x 100 Sales turnover This is the formula of working out Gross profit margin (GPM). Gross profit is the difference between sales revenue and the cost of sales divided the sales turnover. In 2001 Cadflake PLC achieved 44.58% GPM. This then decreased the following year to 43.94%. This means for every £1 that Cadflake generated in sales they earned 44.58% and in 2002 they earned 43.94%. These are shown in the ratios 2001 1 : 1.58 2002 1 : 1.87 Even though it increased the following year the company's GPM which determines how much the company is worth fell by 0.62%. Form looking at the companies GPM and how much they made over these two years it shows it has decreased. It is bad for the company because it means that the company's sales...
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