Talk:Gross margin
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Whats a good profit margin?
Hello all,
What is the difference between this margin calculation and the cost-plus cal ?
Best regards,
JJD
This page is ugly. Why can't it just use plain text calculations or tables instead of those gaudy big letters?--Jd147703 17:50, 21 July 2006 (UTC)
Why are margins generally so high in the UK?
Gross Margin defenition can be perplexed according to our needs.
For example
My sales value is 10.05 Lakhs and Profit earned is 3.5 Lakhs, as per Gross Margin it shows my profit percentage as 35%.
By fact I am buying this item for 7 Lakh and selling for 10.05 Lakhs which give me 50% gross margin.
Can some one help me to resolve this problem.
Is Gross Margin concept a fake?
--- Hello. The Gross Margin concept is a very widely used ratio designed to show businesses how profitable each activity/retail line is , without distortion from fixed cost allocations such as head office, staff, etc. It is not a "fake", but I think your maths may be a little off!
Your sales value is 10.05 and you say you buy the item for 7, this leaves you with a gross profit of 3.05. Your gross margin is thus 3.05/10.05 = 30.3% I have no idea how you think your profit is 3.5, but I hope this helps! -adamski
[edit] Categorising
I think the page should be categorized under Finance Ratios. Seeing as no-one else has categorized it, I will put it in that category- if you feel it unsuitable, change it and discuss here. —The preceding unsigned comment was added by 82.37.136.179 (talk) 23:40, 2 February 2007 (UTC).
Carpenter
Bla Bla Bla what is the simple calculation for finding your margin? If i know my sale price and i know my cost for the job what is the margin?
gross margin=cost of sales/sale price The point is :the definition of the "cost of sales" is quite different.
[edit] research and dev costs?
Are Rnd costs considered part of cost of goods sold?~
Yeah... If you're a fool.
[edit] Gross Margin As An Aspect of Incentivising A General Manager
How would one calculate an bonus / incentive scheme in relation to a Gross Margin? I presume you are looking to have the gross margin as a high positive figure?! Or am I barking up the wrong tree?
Hello. One would not often use Gross Margin to incentise a General Manager. By definition this figure excludes many of the costs of doing business such as staff, admin, R&D, head office costs, etc. If you think of Gross Margin as Selling Price/Price paid to supplier, you can see that it may be a good way of incentivising a buyer (in order to incentivise them minimising the price paid to suppliers) or alternatively a store/department manager (who might have some responsibility for pricing and sales as well as cost of goods).
Incentivising a General Manager might be better achieved on the basis of EBIT (i.e. Operating Profit) or via share options (i.e. the higher the share price at the end of the year, the more you earn.) I am sure wiki has detailed articles on these things in its own right. -adamski —Preceding unsigned comment added by 212.140.240.2 (talk) 16:09, 1 November 2007 (UTC)
