Gross profit percentage: In plain English, this is the percentage of money you’ve made from selling a good or service – after you subtract the cost of producing that good or service.
You want that percentage to be as high as it can reasonably be. The higher your gross profit percentage, the healthier your business and the more profit you’ll take home at the end of the day.
How Do You Calculate Gross Profit Percentage?
Use this markup calculator reporting example to help check your company-wide Gross Profit. If you divide your profit by the Cost of Production, you can then compute what your average Markup has been.
Have you been charging enough?
Use the following reference charts to easily convert between Gross Profit and use a Markup calculator as you estimate costs and pricing for individual jobs.
Use this chart to show what your Gross Profit will be if you mark up the amount shown in the first column:
Use the following chart to show what your Gross Profit will be if you mark up the amount shown in the first column:
If you enjoyed this article, you’ll also love “5 Ways to Use Job Costing To Increase Your Gross Profits”
Tip from Diane: Many of my clients like to print these Markup calculator charts in color. Some like to place them in sheet protectors or even laminate them!
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