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Profit-Margin-Formula Excel Template

The document provides instructions and examples for calculating profit margin based on net income and net sales. It includes three examples that show the calculation for different businesses. The profit margins calculated are 10%, 6%, and 4.5% respectively. Formulas for calculating total expenses, net profit, and profit margin are also provided.

Uploaded by

Mustafa Ricky Pramana Se
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194 views4 pages

Profit-Margin-Formula Excel Template

The document provides instructions and examples for calculating profit margin based on net income and net sales. It includes three examples that show the calculation for different businesses. The profit margins calculated are 10%, 6%, and 4.5% respectively. Formulas for calculating total expenses, net profit, and profit margin are also provided.

Uploaded by

Mustafa Ricky Pramana Se
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Profit Margin Excel Template

Visit: www.educba.com
Email: info@educba.com
XYZ is claiming that it has a very good business and is making adequate profits. Ltd.They have
given you the below details. You are required to calculate the Profit Margin of XYZ

Net Income 100000


Net Revenue 1000000

Profit Margin is calculated using the formula given below


Profit Margin = (Net Income / Net Sales) x 100

Profit Margin 10
Gautam has started a new business in the gym around a year ago. He was inexperienced in the business
and he feels he has made adequate sales to recover from loss and appears to be making a profit. The
accountant of the firm has provided him below details and he is curious to know that margin has his
newly run business has earned.You are required to compute profit margin for this new business.

Particulars Amount
Sales 45,500,000
Cost of Goods Sold 34,125,000
Selling Expenses 1,820,000
Administrative Expense 910,000
Depreciation 3,640,000
Income Tax 2,275,000

Total Expenses is calculated as:

Total Expenses 42,770,000

Net profit is calculated using the formula given below


Net profit = Sales – Total Expenses

Net Profit 2,730,000

Profit Margin is calculated using the formula given below


Profit Margin = (Net Income/ Net Sales) x 100

Profit Margin 6
The fees for registering them on the portal were 100,000 for a year. The manager was
skeptical about the same as he believes any profit margin below 5% would be an issue
for them in the long-term. You are required to calculate if the profit margin does
fall below 5% if they opt to register themselves over the online portal?

Particulars Amount
Sales 5,000,000
Cost of Goods Sold 3,250,000
Administrative Expense 600,000
Depreciation 700,000
Registration Portal Expense 100,000
Income Tax 125,000

Total Expenses is calculated as:

Total Expenses 4,775,000

Net profit is calculated using the formula given below


Net profit = Sales – Total Expenses

Net profit 225,000

Profit Margin is calculated using the formula given below


Profit Margin = (Net Income/ Net Sales) x 100

Profit Margin 4.5

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