The Net Profit Margin is the difference between the Selling Price and the summation of the Cost of Goods Sold, Operational Cost, Interest, Tax with respect to the Selling Price. C= total cost of the product. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 2022 . This formula divides remaining revenue by sales revenue: =IMDIV (B6,B3) Finally, multiply the gross profit ratio by 100 to solve for gross profit margin. The cost of goods sold includes the price allocated to products and services amounting to $144,996 million and $16,786 million each. I suggest setting up your pivot table first and then add [Gross Margin] and [Total Sales] to the pivot. Image Credit: Screenshot courtesy of Microsoft. In percentage the result is: N > M. Pay attention, the extra charge can be 20 000%, and the margin level will never exceed 99.5%. 2. But there's a lot more to know about markups and margin. Let us take the example of ASD GmbH CO KG to illustrate the computation of gross margin. Below are steps to calculate gross margin: 1. Open Microsoft Excel If you already have a workbook with data, you can go to your saved files and open it in Microsoft Excel. Please do it by yourself. The gross margin derives by deducing the cost of goods sold (COGS) from the net revenue or net sales (gross sales reduced by discounts, returns, and price adjustments).