How to calculate and know your Margins in a business (part 1)
MARGINS ▪︎ ( Real numbers and formulas) _ There are certain types of margins and on these read I will be able to only cover the first five. So stay tuned for the next read for the other five ... Let's get started 💪 : ~Understanding margins is one of the most important skills in running a business. --~Margins tell you where money is created, where it leaks, and how efficiently you use resources like time and energy. ~Below are the real formulas used in business, from basic profit margins to operational and efficiency margins. 1. Gross Profit Margin GPM (Product Profitability) -This shows how profitable your product is before operating costs. Formula: GPM = Revenue - cost of goods sold × 100% Revenue Example: Revenue = 100 KSh Cost to produce = 60 KSh [(100-60)×100]÷100 =40% Gross Margin = 40% ☆ This means 40% of revenue remains to cover operations and profit....