Profit & Profit Margin

Retail Math  Inflations Effect on Fashion   Apparel Industry Financials

Would you like to make a profit or a loss?  Well, if you are not an idiot, we assume you prefer to make a profit.

Profit is a measure of profitability.

"Profit" & "Profit margin" are different. 

Yes, Gross & Net have differences as well.

Gross profit / Gross Income / Gross Margin is the profit a company makes after deducting the variable costs associated with making and selling its products, or the costs associated with providing its services.

Although the terms are similar (and sometimes used interchangeably), gross profit is NOT the same as gross profit margin. Gross profit is expressed as a currency value, gross profit margin as a percentage.

The formula for gross profit is as follows:

Gross Profit = Revenue - Cost of Goods

The formula for gross profit margin is as follows:

Gross Margin = (Total Revenue−Cost of Goods Sold) / Total Revenue x 100

Net profit / Net Profit Margin Net profit is calculated as revenue minus "all" expenses from total sales (variable & fixed costs). The actual profit after working expenses not included in the calculation of gross profit have been paid.  Net profit margin measures how much profit your business generated as a percentage of your total revenue.

Net Profit = Net Sales  - Total Expenses

Net profit margin measures how much net income is generated as a percentage of revenues received.

Net Profit Margin = (Net Profit / Net Sales) x 100

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