How to Calculate Margin

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In order to calculate a sales margin, add up all of the sales, calculate the gross number of expenses and then subtract that number from total profits. Divide net profit by gross sales to get a sales margin with help from an experienced teacher in this free video on basic math.

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Video Transcript

Hi, I'm Sue and I'm here today to talk to you about how to calculate a margin. More importantly how to calculate a sales margin. It is a good way to see how profitable your business is going to be. First you'll take the financial statements for a certain period of time and you'll add up all your sales. Secondly then you'll need to also at the same time take a total of all your expenses that you've had for those particular sales. After you calculate your gross number of expenses you want to take that number and subtract it from your total profits. This will be your gross amount of sales. Then you'll want to divide your net profit by your gross sales. This will be your sales margin.


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