Question

Given the following information from a profit-and-loss statement, determine the gross margin percentage:

A) Net sales: $80,000
B) Net profit: $5,000
C) Cost of goods sold: $45,000

Answer 1

The gross margin percentage is calculated by subtracting the cost of goods sold from the net sales to get the gross margin, then dividing by net sales and multiplying by 100. In this example, the gross margin percentage is 43.75%.

Step-by-step explanation:

To calculate the gross margin percentage, you need to know the net sales and the cost of goods sold (COGS). The gross margin itself is the difference between net sales and COGS. To find the percentage, you divide the gross margin by net sales and then multiply by 100.

Using the provided information:

• Net sales: $80,000
• Cost of goods sold: $45,000

First, calculate the gross margin:

Gross margin = Net sales - COGS

Gross margin = $80,000 - $45,000 = $35,000

Next, calculate the gross margin percentage:

Gross margin percentage = (Gross margin / Net sales) × 100

Gross margin percentage = ($35,000 / $80,000) × 100 = 43.75%