How to Define Gross Profit Percentage

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Gross profit percentage is defined as the ratio between gross profit and total sales. Determine gross profit percentage by calculating the gross profit first with instructions from a certified public accountant in this free video on business and accounting terms.

Part of the Video Series: Business & Accounting Terms
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Video Transcript

In this clip, we'll define gross profit percentage. As we said earlier, the gross profit is the revenue minus the cost of sales. The growth profit percentage is that ratio between the gross profit and the total sales. For example, if we sell $100,000 worth of socks for $200,000 and earn a gross profit of $100,000, the gross profit percentage is 50%.


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