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What is the gross margin ratio?

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Question added by Rana Alnajjar , Web developer , Lebcards
Date Posted: 2016/12/25
Nazmul Islam CMA
by Nazmul Islam CMA , Manager , Robi Axiatal Ltd.

Gross margin ratio means the % of gross margin (Revenue-prime cost) to revenue.

Majid Wangade
by Majid Wangade , Senior Accountant , KANTOUR LIMITED COMPANY ( Real Estate, Construction and Asset Management )

The gross margin ratio shows the proportion of profits generated by the sale of products or services, before selling and administrative expenses.

 

 Sales – (Direct materials + Direct Labor + Overhead)                                Sales

manseer muhammed ali
by manseer muhammed ali , Accountant General , Royal Lighting L.L.C & Royal Furnishing LLC

The gross margin ratio is also known as the gross profit margin or the gross profit percentage. The gross margin ratio is computed by dividing the company's gross profit dollars by its net sales dollars.

Abdullah Aziz Eldain Morsi  Elgendy -        CMA  Candidate
by Abdullah Aziz Eldain Morsi Elgendy - CMA Candidate , Regional Receivable Accountant , Amiantit Group of Companies

This ratio measures how profitable a company sells its inventory or merchandise

ibrahim serag
by ibrahim serag , foreign purchasing& Logistics Management Specialist at shams Group 2012- present , Shams industrial

it gross profit related the Total sales value

Soliman Abd  ALmalak Gendy
by Soliman Abd ALmalak Gendy , مدير ادارة مراقبة حسابات , الجهاز المركزى للمحاسبات

It's counted by dividing the gross profit by its net sales. *It represents the percent of total sales revenue that a company retains after incurring the direct costs associated with producing the goods and services it sales

Ashraf E. Mahmoud (PhD)
by Ashraf E. Mahmoud (PhD) , University Lecturer, Freelancer Consultant and Trainer for Int'l Business & Banking TF. , FreeLancer

Thanks for invitation,

Gross Margin Ratio is calculated as a percentage as follows:

 ( Net Sales - Cost of goods sold) / Net Sales*100

It is usually used as indicator in calculating the selling price, or as a tool to measure the retail performance.

 

 

حمادة فوزي جمعة عشماوي
by حمادة فوزي جمعة عشماوي , مراجع حسابات الشركة , مؤسسة عاج العربية للمقاولات والصيانة

The proportion of profit margin is the ratio used to cover part of the fixed costs of the product

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