How to Calculate Net to Gross Ratio

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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.

References

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