A companys gross profit margin percentage is calculated by first subtracting the cost of goods sold COGS from the net sales gross revenues minus returns allowances and discounts. Calculation of the gross profit percentage formula is done by dividing the gross profit by the total sales and expressed in percentage terms. So an alternative margin formula is as follow.
For example the gross profit on a chair that costs 65 to manufacture and sells for 80.
You do this by multiplying the result by 100. Gross profit margin is calculated by deducting the cost of products sold from net sales. Use the Formula in D2 cell 1- B2C2 As you can see in the above snapshot first data percentage of profit margin is 8. By its nature Gross Margin is always lower than Markup.