This report shows the theoretical margins that would be obtained on items if they were sold at full net retail prices. You can apply a specific sales price list to the report so that the theoretical profitability of different sites or price lists can be compared. If the cost price exceeds the sales price, a negative margin would result. An item with zero cost price will result in 100% margin (a margin can never exceed 100%). The net sales price is the sales price after discount/VAT deductions.
The % gross profit margin is calculated as follows:
Net Sales Price – Net Purchase Price x 100 = Margin
Net Sales Price
Thus for a product bought at 50p and sold for £1.00, the margin would be:
1.00 - .50 x 100 = 50% Margin
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