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Calculating Negative Gross Margin

  1. #1
    Registered User
    Join Date
    11-07-2007
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    Calculating Negative Gross Margin

    So I'm calculating gross margin with no issues...

    (Sell - Cost)/Sell

    Here's the question... what if the sell is negative and causes the entire Gross Profit calculation (Sell - Cost) to be negative? Then I get a false positive Gross Margin. Example:

    Sell = -5
    Cost = 3
    (-5 - 3)/-5
    -8/-5 = 1.6

    Is there a correct way to do this? Or do I just use a statement that makes the Gross Margin % zero if the Gross Profit is negative?

  2. #2
    Forum Contributor
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    09-27-2012
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    Re: Calculating Negative Gross Margin

    In principle, the sales price cannot be a negative number....please recheck if "sell = -5" is indeed correct.

    However, the gross profit can be very much negative if your sales amount is less than the cost!
    If solved kindly remember to mark Thread as solved.
    Click the small star icon at the bottom left of my post if this was useful.

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