{"id":1010,"date":"2019-05-05T23:25:21","date_gmt":"2019-05-05T23:25:21","guid":{"rendered":"https:\/\/www.smartsims.com\/support\/?post_type=ht_kb&p=1010"},"modified":"2020-08-11T03:18:48","modified_gmt":"2020-08-11T03:18:48","slug":"how-do-i-calculate-gross-margin","status":"publish","type":"ht_kb","link":"https:\/\/www.smartsims.com\/support\/article\/how-do-i-calculate-gross-margin\/","title":{"rendered":"How do I Calculate Gross Margin"},"content":{"rendered":"

Gross Margin (gross profit)<\/a> is how much your firm earned this year by making
bikes and selling them.<\/p>\n \t\t

\r\n \t\t\tGross Margin Calculation<\/span> \t\t\t \t\t\t\t

\r\n \t\t\t\t\tGross Margin = (Sales Units x Average Wholesale Price) – (Sales Units x Average Unit Cost)<\/strong> \t\t\t\t<\/p>\r\n \t\t\t \t\t\t\r\n \t\t<\/div>\r\n \t\t\n

\"Gross<\/p>\n

\u00a0<\/p>\n

Your firm may also use Gross Margins to determine how much money you have left over from sales to cover other operating expenses.<\/p>\n \t\t

\r\n \t\t\tNote<\/span> \t\t\t \t\t\t\t

\r\n \t\t\t\t\tThe Gross Margin amount does not include the following costs: Inventory Costs, Product Marketing costs, and Product Development costs. \t\t\t\t<\/p>\r\n \t\t\t \t\t\t\r\n \t\t<\/div>\r\n \t\t\n

What if I have a negative Gross Margin?<\/h3>\n

A negative Gross Margin means that your per unit costs are higher than your wholesale price and that your product is running at a loss.<\/p>\n

There are three things that you can do to increase your Gross Margins:<\/p>\n