ECONOMICS

Detailed explanation-1: -(Total revenue/ revenue-total expenses/ cost = net profit) Calculate profit margin (net profit ratio/ net margin/ net profit margin/) Net Profit / Revenue Or Selling Price You get a profit margin.

Detailed explanation-2: -Express 20% in its decimal form, 0.2. Subtract 0.2 from 1 to get 0.8. Divide the original price of your good by 0.8. There you go, this new number is how much you should charge for a 20% profit margin.

Detailed explanation-3: -(Revenue – Cost of goods sold)/Revenue = Sales margin For example, you should include any sales discounts or allowances, the cost of the materials needed for the good or service, payment made to employees for producing the good or conducting the service, and any salesperson commission.

Detailed explanation-4: -It is expressed as a percentage. So if the ratio is 25%, that means that the company’s gross profit margin is 25 cents for every dollar in sales. Higher gross profit margin ratios generally mean that businesses do well at managing their sales costs.