when to use these

[nikko0355]

ok today i have offically hit a wall.....

gross profit margin = gross profit/ cogs


gross margin % = gross profit / sales.


i am trying to better understand the diference.. i am looking at this as a % is of the total so you want the gross margin % to be based off of sales....

but why in the gross profit margin calculation you divide by cogs?

 

[culley]

I think you need to reread the text as I don't recognize your gross profit margin formula.

Gross Profit = Sales - COGS

Gross Profit Margin = Gross Profit / Sales

Not sure where you got your first formula. Hope this helps.