Gross Profit Percentage

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Definition: Gross Profit Percentage

Gross profit percentage is the percentage of revenues that a company saves after considering the direct fixed and variable costs of production. The gross profit percentage can be calculated as follows,

Formula

Gross profit percentage= (Gross profit margin)/Revenues × 100%

Gross profit percentage= (Revenues-Cost of Goods Sold)/Revenues× 100%

Higher gross profit percentages indicate greater efficiency of companies to convert their raw materials and resources into sales of final products.


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