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Describe Gross Profit Percentage


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Solution

Gross Profit Percentage:

The gross profit margin is an easy calculation to determine the overall profitability of an organization's products or services. Simply speaking, the percentage is a reliable indicator of the organization’s competency when producing a good or service.

How is the gross profit percentage used and how is it calculated? Management analyzes this metric to track company performance and find ways to increase operational efficiencies. External users, on the other hand, use this metric to compare companies and analyze industry trends.

Thus, The gross profit percentage formula is calculated as follows=Sales-(TotalLabor+Materials+OverheadCosts)salesx100


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