When preparing prices or discounting sales items in Orax SDI, the system uses the GPM calculation to ensure that you make informed decisions about your discounting. Sales Quotations have a "Markup" function available, but it is generally safer to use GP (Gross Profit) rather than Markup to discount. Markup can lead to losses and selling below your actual cost.
The Gross Profit Margin is used in businesses to calculate the selling price of goods or services. This method is widely used to determine profitability. The Gross Profit Margin Ratio is used as an indicator of a business's Financial health. The higher the percentage the healthier the business, and if the ratio is lower, the business is making a smaller profit or even losses. The formula used to calculate the GPM is as follows:
Gross Profit = Selling - Cost Price x100
This formula is the most common method used in business systems to manage profitability of selling prices.