Gross Profit (GP) ratio

Modified on Sat, 29 Oct, 2016 at 7:24 PM

How to find out Gross Profit ratio?

Gross profit ratio is a profitability ratio that shows the relationship between gross profit and total net sales revenue. Gross Profit is calculated by subtracting Sales direct income and purchase direct expense.

Sales Direct income is one which is earned directly by way of sales, TransactionDate is the sales transaction date, Purchase direct expense is the direct expense from purchasing goods, and Stock is the available goods stock.

UDDC Name 1: Gross Profit

UDDC Formula 1: ((Sales_DirectIncome+mostRecent(Stock,TransactionDate,"Sum","","") )-(Purchase_DirectExpense+leastRecent(Stock,TransactionDate,"Sum","",""))) 

In this formula, Income is added with Closing stock and Expense is added with Opening Stock.

e.g: Sales_DirectIncome = 3,05,11,178, Closing Stock = 1,67,06,432, Purchase_DirectExpense = 2,32,17,892 and Opening Stock = 1,39,92,440.

Therefore, the Gross Profit is (3,05,11,178 + 1,67,06,432) – (2,32,17,892 + 1,39,92,440) = 1,00,07,279.

UDDC Name 2: GP Ratio

UDDC Formula 2: (GrossProfit/(Sales_DirectIncome))*100 

Ratio is calculated by multiplying the Gross profit with 100 and then dividing it by Sales direct income.

e.g: The GP Ratio here is (1,00,07,279 / 3,05,11,178) *100 = 32.80%

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