Gross additional markup
Gross additional markup, also known as GPM, is a measure of the total cost of goods sold as a percentage of revenue. It is an important metric for businesses to understand their profitability and efficiency in managing costs.
Calculating gross additional markup is simple. It involves subtracting the cost of goods sold from total revenue and then dividing that number by total revenue. The result is then multiplied by 100 to get the percentage.
For example, if a company has total revenue of $100,000 and cost of goods sold of $60,000, the gross additional markup would be calculated as follows:
($100,000 – $60,000) / $100,000 = 0.4
0.4 x 100 = 40%
This means that the company’s gross additional markup is 40%, indicating that 40% of the revenue is left after covering the cost of goods sold.
Understanding gross additional markup is crucial for businesses to make informed decisions about pricing, cost management, and overall profitability.
For more information, you can visit Wikipedia.