Gross margin means after deduction of Direct Expense & Net margin means after deduction of Indirect expense its correct.?
2 Answer(s)
SANDEEP
Margin implies relative to the revenue..which means there should be Revenue in denominator while calculating any margin.
Gross Margin = (Revenue - COGS)/ Revenue
Net Margin = Net Profit/Revenue
where Net Profit= Revenue - COGS - Operating Expenses - Interests and Tax.
Dec 07 2013 02:54 AM
Gross Margin = (Revenue - COGS)/ Revenue
Net Margin = Net Profit/Revenue
where Net Profit= Revenue - COGS - Operating Expenses - Interests and Tax.
Binny
Sagar your formulas are right for Gross PROFIT and Net PROFIT.
Sandeeps forumulas are right for the corresponding margin calculations.
PROFIT is the number and MARGIN is the % exhibiting the PROFIT number as a % of revenue.
Dec 17 2013 11:31 AM
Sandeeps forumulas are right for the corresponding margin calculations.
PROFIT is the number and MARGIN is the % exhibiting the PROFIT number as a % of revenue.