Margin calculation is an essential indicator of the profitability of your revenue and allows you to determine the profit it generates.
Margin calculation is an essential indicator of the profitability of your revenue and allows you to determine the profit it generates.
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 VAT - Purchase cost excluding VAT) / Selling price excluding VAT
The higher the gross margin, the more profitable your recipe and the more money you make.
The gross margin calculation is performed automatically by our solution. However, for this calculation to be correct, you must complete:
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 may change the margin thereof.
To improve gross margin, you can:
1. Increase the selling price of your recipe
2. Reduce the cost of purchasing your ingredients: