ECONOMICS

Detailed explanation-1: -To create accurate financial statements and monitor your business’s financial health, you should understand the two types of profits: gross profit and net profit.

Detailed explanation-2: -The profit margin is a ratio of a company’s profit (sales minus all expenses) divided by its revenue. The profit margin ratio compares profit to sales and tells you how well the company is handling its finances overall. It’s always expressed as a percentage.

Detailed explanation-3: -You can easily determine a company’s profit margin by subtracting the cost of goods sold (COGS) from its total revenue and dividing that figure by the total revenue.

Detailed explanation-4: -Terminology speaking, markup percentage is the percentage difference between the actual cost and the selling price, while gross margin percentage is the percentage difference between the selling price and the profit.