How to Calculate Net to Gross Ratio


The net to gross ratio is used by businesses to determine the amount of profit made compared to the operating costs of the business. This ratio also allows business owners to determine reasonable reductions in sales prices. The reason for using this ratio when deciding to lower sale prices is simple: if the ratio is too low, money will be lost instead of profit gained.

Things You'll Need

  • Calculator
  • Enter the numeric gross profit amount into the calculator.

  • Hit the divide button and enter the numeric net sales amount.

  • Hit the multiplication button, then enter 100.

  • Press the equal button to get your net to gross profit ratio.

Related Searches


  • Photo Credit Jupiterimages/ Images
Promoted By Zergnet


You May Also Like

  • Gross Profit Ratio Analysis

    Gross profit is defined as sales minus costs related to those sales. A gross profit ratio is gross profit expressed as a...

  • What Is Gross Debt Ratio?

    The gross debt ratio, more commonly referred to as the debt-to-equity ratio, is a key financial ratio used in the financial analysis...

  • Gross Vs. Net Profit

    Gross and net profit are terms that are used frequently in accounting. They're also used everyday in life to describe many things....

  • Is Debt Ratio Based on Net or Gross Pay?

    When was the last time you applied for a loan or credit card and were told your financial ratios are not favorable?...

  • What Is Gross Spread Ratio?

    Gross spread ratio looks at the spread of interest between borrowing and lending. Banks make money by borrowing short-term money from depositors...

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!