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How to Figure Sales and Profit Margins Percentages

When looking at the profitability of a company, investors look at a number of financial statistics including the company's total sales, profit margins and gross margin percentages. The more sales, the better the company is doing at marketing its goods. However, investors also want to see the sales being profitable. The profit equals the amount of the sales price the company keeps after paying its costs. The profit margin can also be measured as a percentage of the sales price.

Calculator

Instructions

- 1
  Multiply the selling price of the item times the number of units sold to find the total sales. For example, if you sell bowls at $25 each and in a month you sell 1,000, multiply $25 by 1,000 to get $25,000.
- 2
  Subtract the cost of producing the product from the selling price to find the profit margin. For this example, if the bowl costs you $16, subtract $16 from the selling price of $25 to get $9.
- 3
  Divide the profit margin by the selling price and multiply the result by 100 to find the percentage of the sales price that goes to profit. In this example, divide the profit of $9 by a selling price of $25 to get 0.36. Then multiply 0.36 by 100 to find the percentage profit on each sale equals 36 percent.

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Middle School