- 1). Subtract the costs of producing, obtaining and selling your goods from the total income to find your gross profits. For example, if you spend $55,000 selling goods and bring in $78,000 in sales, subtract $55,000 from $78,000 to find a gross profit of $23,000.
- 2). Divide the gross profit by the total sales to find the profit ratio as a decimal. In this example, to find the gross profit ratio, divide $23,000 by $78,000 to get 0.2949.
- 3). Multiply the decimal by 100 to convert the ratio to a percentage. Completing the example, multiply 0.2949 by 100 to find the gross profit ratio equals 29.49 percent.
- 1). Subtract the costs of producing, obtaining and selling your goods from the total income to find your gross profits. For example, if you spend $55,000 selling goods and bring in $78,000 in sales, subtract $55,000 from $78,000 to find a gross profit of $23,000.
- 2). Subtract the cost of taxes from your gross profit to find the net profit. In this example, if taxes for the year equal $9,000, subtract $9,000 from $23,000 to find a net profit of $14,000.
- 3). Divide the net profit by the total sales to find the profit ratio as a decimal. To find the net profit ratio, divide $14,000 by $78,000 to get 0.1795.
- 4). Multiply the decimal by 100 to convert the ratio to a percentage. Completing the example, multiply 0.1795 by 100 to find the net profit ratio equals 17.95 percent.
Gross Profit Ratio
Net Profit Ratio
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