What is margin? 

The gross margin takes into account the selling price excluding VAT of your recipe and the purchase cost excluding VAT of the ingredients that compose it.

• It is calculated as follows: 
  Gross margin = (Selling price excluding tax - Purchase cost excluding tax) / Selling price excluding tax

The higher the gross margin, the more your recipe is profitable and earns you money. 

• Melba also displays the multiplier coefficient:
  Coefficient = Selling price excluding tax / Purchase cost excluding tax

What information should be provided? 

The gross margin calculation is performed automatically by our solution. However, for this calculation to be correct, you must complete: 

• the purchase prices of your items excluding VAT
• the selling prices of your recipes including tax
• the VAT applied to switch to the selling price excluding VAT

What impacts the margin of a recipe? 

Any change in the selling price of your recipe and/or any change that would affect the purchase costs of the ingredients that make up your recipe can modify the margin of this one.

To improve gross margin:

1. Increase the selling price of the recipe

2. Reduce the cost of purchasing ingredients:

• By changing supplier 
• By substituting one or more ingredients 
• By changing the quantities of your ingredients