question 2: is the gross profit margin high or low? Of course, it's good to be high ~ the higher the gross profit, the higher the net profit.
Question 3: Simply put, is the higher the gross profit, the better? Gross profit margin is the percentage of gross profit and sales income (or operating income), in which gross profit is the difference between income and operating cost corresponding to income, which is expressed by the formula: gross profit margin = gross profit/operating income× 1% = (main business income-main business cost)/main business income× 1%
Obviously, the higher the better, the more money you earn
Question 4. I. definition:
Profit margin, also known as sales gross margin, is an indicator to measure profitability, usually expressed as a percentage. In the economic meaning, the higher the gross profit margin, the higher the profitability of the enterprise and the stronger the ability to control costs. However, for enterprises of different scales and industries, the comparability of gross profit margin is not strong.
2. Calculation formula:
1. Gross profit margin = (excluding tax price-excluding tax purchase price)/excluding tax price ×1%
2. Gross profit margin = (1-excluding tax purchase price/excluding tax price) ×1%
Comprehensive gross profit margin net interest rate of assets is the ratio of net profit divided by average total assets
. The net profit rate of assets reflects the comprehensive effect of enterprise's asset utilization, which can be decomposed into the product of net profit rate and asset turnover rate, so that we can analyze what causes the increase or decrease of net profit rate of assets.
gross profit margin = (sales revenue-cost of sales)/sales revenue ×1%
III. Influencing factors
First, the market competition of products is fierce
As the saying goes, if there are no such products in the market, or there are few such products, or compared with similar products in the market, their quality and functional value should be superior.
Second, whether the marketing purpose of the enterprise is to expand the market share or other reasons. If it is to expand the market share, it may open the market at a lower price first, and then readjust the pricing strategy according to the market recognition after the market is stable. If it is to recover the investment as soon as possible, the enterprise may enter the market at a higher price, and then gradually infiltrate it. The market usually implements the policy of high price and small quantity for mature products. How to balance the price and sales volume in order to maximize profits is an important problem that enterprises must face in marketing planning, but can't avoid.
Third, the size of R&D cost invested by enterprises in developing products
A feature of modern economy is that products are updated quickly. If new products with emerging functions can be developed faster and better, and the products have advantages in function, use value and price, who can occupy the highest point of the market? Enterprises have a large amount of R&D investment, usually they have made many inventions and creations, and they have gained more benefits from patent protection. Emerging products have more costs and efficacy.
Fourth, the brand effect of the enterprise
If the enterprise is well-known, for example, its products have well-known trademarks or local well-known brand trademarks, and its product quality is recognized by the market, then the gross profit of such products will usually be higher. On the contrary, even if the quality of brand-name goods is good, the gross profit margin of their products is usually not as high as that of products with high brand value because of their lack of visibility. Of course, it cannot be generalized. The gross profit of some well-known brand products belongs to the middle level, mainly relying on higher sales volume to earn profits, while some miscellaneous brand products mainly rely on counters and manpower expansion because they don't spend advertising investment expenses, and their gross profit margin is high because of the low advertising cost in their prices.
V. The size of fixed costs invested by enterprises
mainly refers to the investment in fixed assets, such as machinery and equipment, factory buildings and factory rents, which constitute fixed manufacturing costs. From a certain point of view, it also reflects the entry threshold of enterprises. In order to recover this huge investment cost, enterprises will also improve the gross profit of their products. On the contrary, if enterprises invest a small amount of machinery and equipment, or most of them adopt the form of OEM assembly or entrusted processing,
VI. The size of technology cost invested by enterprises
For example, if an enterprise produces patented products with independent intellectual property rights, especially invention patents and technology patents, and the patented products have advantages over the original similar products in the market in terms of product quality and product functions, they have cost advantages, are exclusive in competition, and naturally have the ability to increase prices. At this time, the gross profit of the products is usually higher;
VII. Complexity of technical process of products
The technical requirements of employing people, the size of labor cost, the complex production process of products, high technical content, high level of technicians used and natural gross profit of products ...... > >
Question 5: The higher the income from the main business, the lower the gross profit margin. What does that mean? Sales gross profit margin = (sales income-operating cost)/sales income *1%
Cost gross profit margin = (sales income-operating cost)/operating cost *1%
So, when your income increases, your cost increases more than your income. You can use it according to your income. It is clear
Question 6: The higher the gross profit, the better? First, the definition of gross profit margin is very simple. Sales revenue MINUS sales cost is sales gross profit, and gross profit divided by sales revenue is gross profit margin.
second, the higher the gross profit margin, it shows that the profitability of the company's products or services is super strong. Generally speaking, the higher the gross profit margin, the better.
3. However, the higher the gross profit margin, the better. On the contrary, the lower the gross profit margin, the better. Behind the figure of low gross profit margin, the successful model of leading commercial retail enterprises is hidden, with lower price and more quantity than competitors. China ancients have long summed it up: small profits but quick turnover. The lower the price, the thinner the profit and the more sales. The more sales, the lower the purchase cost, and the lower the retail price. Although the profit is thinner, the sales are more. The small profit on each commodity, through the accumulation of huge sales, has made the whole shopping mall profitable.
Question 7: Can you explain the difference between gross profit margin and gross profit margin? Gross profit margin = total business-expenses
Gross profit margin = gross profit margin/total business
Gross profit margin refers to the difference between tax-free income and tax-free cost of goods. The specific formula is: Gross profit margin = total income of main business-main business cost. It is a period indicator. It changes with time. It is an absolute number. Gross profit margin is used to reflect how much gross profit an enterprise contains in each yuan of income. It is the basis of net profit. Specific formula: gross profit margin = (total income of main business-total cost of main business)/total income ×1%, which is a ratio and a relative number, and it reflects profitability. Difference: gross profit is a period, and financial indicators will change with time. Generally, the longer the time, the greater the gross profit; Gross profit margin is a relative index, which has nothing to do with time changes. The higher the gross profit margin, the stronger the profitability. < P > Question 8: What kind of industry has a high gross profit margin and what kind of low gross profit margin is good? So what is the criterion for judging the gross profit margin as high or low? From the profit point of view, the higher the gross profit margin, the greater the profit of the enterprise. At the same time, it also shows that the enterprise's products have high technical content, strong market demand, relatively low cost, good competitiveness and price space, and strong ability to bear expenses. So the higher the gross profit margin, the better. From the tax point of view, the higher the gross profit margin, the more value-added tax will be paid. Because the higher the gross profit margin, the greater the added value, and the higher the value-added tax burden. Gross profit margin = (income-cost)/income Gross profit margin is calculated or budgeted, not judged. Please do me a favor.
Question 9: The higher the gross profit margin, the higher the breakeven point. Why do you confuse the variable cost rate and gross profit margin here? Variable cost rate belongs to the category of management accounting, and gross profit rate belongs to the category of financial accounting; And you mix the cost with the gross profit, which is equivalent to the marginal profit rate (that is, the 1- variable cost rate). They can only use one data as the standard when calculating breakeven point.
breakeven point = 9/(1-1%) = 1 million
breakeven point = 9/5% = 1.8 million
breakeven point = 9/6% = 1.5 million
If the variable cost is unchanged.
Question 1: How to correctly view and analyze the gross profit margin? Pay attention to the quality of profit.
Only when an enterprise has gross profit will it have core profit. Whether as a business operator or an investor, it is a common mentality and a normal mentality, but it is also because people pursue gross profit. Many problems have arisen.
Before talking about specific comparison methods, we should first emphasize a basic concept that financial statements are all composed of a string of numbers, but when we look at the statements, we are not looking at these numbers, but to study the causes of these numbers. Take the gross profit margin as an example. The more the gross profit margin, the better. Who doesn't like making money? But it is not necessarily that the higher the gross profit margin, the better the enterprise.
It is not difficult to manipulate the figures in financial statements. Through various means, the gross profit margin in an enterprise's statements can be violently improved. If you suspect that you are cheating, if it is too low, it means that your competitiveness is not enough, which means that we should understand how the gross profit margin of an enterprise comes from, why it is high and why it is low.
It is unscientific to simply compare the absolute value of the gross profit margin. When analyzing the gross profit margin, we should pay attention to the things behind the figures, not only the quantity of profits, but also the quality of profits
Analysis of the current gross profit margin of comparable companies in two industries
@ xiaoronie's Zhihu Baozipu has been operating for one year and produced its own financial statements. As an investor, I took a look. This year's gross profit margin is 2%, but now I just hold this figure, and I don't know whether it is good or bad. We must compare comparable companies and ask him to come back two days later.
After investigation, the average gross profit margin of the whole steamed bun shop industry is around 35%. It can be seen that the gross profit margin of steamed bun shop is at a lower-middle level in the whole industry, but the gross profit margin is lower than that of its peers, so there is a problem here. I asked CEO @ xiaoronie out and asked him what happened. However, Mr. Xiao explained to me that this year's business problems
the comparison between industries is only the first step of gross profit margin analysis, which guides a general direction for subsequent analysis, in order to achieve a targeted strategy from macro comparison to micro, and will definitely go through this step
the current gross profit margin analysis of three individual companies
1. Starting from the industry leader
I took out the report of the consulting company. Ask @ xiaoronie, what is the gross profit margin of this @ Tang Priest's steamed bun shop? Why is it opened across the street? Their family earns a lot of money. < P > Teacher Xiao hurriedly explained that when the old Tang family sold steamed buns, it added skin jelly to the pork stuffing, which reduced the cost of meat stuffing, which was a dishonest operation. That's why the cost of meat stuffing in our steamed bun shop was substituted into the old Tang family's steamed bun shop after such a high profit margin. We found that Lao Tang's gross profit margin was still higher than ours. After some discussion, we found that it was Lao Tang's selling soybean milk every morning when he was selling steamed buns, and the income from selling soybean milk was higher than that of steamed buns, so he achieved a higher gross profit margin
Through the analysis and comparison of the gross profit margin of the leader, even the special high point in the industry is worth analyzing (even more worthy of analyzing). We can formulate corresponding business strategies from it. The first is to report the fact that the old Tang family is not operating in good faith to the relevant departments. The second is to start selling soybean milk at breakfast in the future, so as to make more money.
2. Looking at our own business problems < P > In the comparison of gross profit margin, we have subdivided the profit structure of our own steamed bun shop and found that our sales income is comparable to other steamed bun shops. But the cost is too high. Most competitors simply subdivide the cost structure. It doesn't matter if they spend more energy on their own business.
The research found that the current cost of flour in our steamed bun shop is almost the same as that of meat stuffing, which is an obvious abnormal phenomenon. We must investigate and later know that @ xiaoronie's flour is all imported from his second uncle @ Dong Chenxi's house, and the price is more expensive than that in the supermarket. We have to change suppliers next year
From the analysis of gross profit margin, we can further pursue the problems existing in the operating income cost in a directional way. Gross profit margin is a signal to remind business operators and investors to pay attention to the possible problems in business activities.
Time series analysis of gross profit margin
1. Time series analysis of gross profit margin of the whole industry
We have obtained the financial report data of the surrounding buns shops in recent years. A general comparison shows that in recent years, the average gross profit margin of selling steamed buns has been decreasing year by year, and the prices have risen recently, and the operating costs have generally gone up. However, other breakfast stalls, such as filling cakes with eggs and baking cakes with sausage, have become increasingly fierce. From the business of selling steamed buns, the life cycle of products has entered a recession, which is what the decline of gross profit margin in the whole industry tells us ... > >