gross profit ratio
Gross profit ratio or Gross profit margin is the total profit that a business has made in a year as a percentage of the company’s sales. Working this out helps the business compare performance from one year to the next and decide how efficiently it is using its raw materials.
You can calculate it using this formula:
(Gross profit ÷ Revenue) x 100 = Gross profit ratio %
Your task
Use this formula to calculate Cadbury’s gross profit ratio in 2005 and in 2006 in the space provided in the spreadsheet. Your answer will turn green if it is correct and red if it is not.
