ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Profit margin is calculated with selling price (or revenue) taken as base times 100. It is the percentage of selling price that is turned into profit, whereas “profit percentage” or “markup” is the percentage of cost price that one gets as profit on top of cost price.

Detailed explanation-2: -When the selling price and the cost price of a product is given, the profit can be calculated using the formula, Profit = Selling Price-Cost Price. After this, the profit percentage formula that is used is, Profit percentage = (Profit/Cost Price) × 100.

Detailed explanation-3: -Net Profit Margin = (Net Profit / Revenue) x 100 In this formula: Net profit is the same as net income: the amount left over after all costs are accounted for. Revenue is how much money was generated by the company by selling products, goods, or services. Multiply by 100 to create a percentage.

Detailed explanation-4: -Calculate a retail or selling price by dividing the cost by 1 minus the profit margin percentage. If a new product costs $70 and you want to keep the 40 percent profit margin, divide the $70 by 1 minus 40 percent – 0.40 in decimal. The $70 divided by 0.60 produces a price of $116.67.

Detailed explanation-5: -Profit margin is the measure of a business, product, service’s profitability. Rather than a dollar amount, profit margin is expressed as a percentage. The higher the number, the more profit the business makes relative to its costs.