Australian Bankruptcies

[JohnDe]

define gross profit, please

Seriously? I know it’s Sunday but you can’t do your own research?

Gross profit is the total profit a company makes after deducting its costs, calculated as total sales or revenue minus the cost of goods sold (COGS), and expressed as a dollar value. Gross profit margin is the profit a company makes expressed as a percentage.​

Gross Profit Margin: Formula and What It Tells You

The gross profit margin is a metric used to assess a firm’s financial health and is equal to revenue less cost of goods sold as a percent of total revenue.

www.investopedia.com

 

[Dona Ferentes]

I know full well what it is. Gross and net.

 

[Value Collector]

I know full well what it is. Gross and net.

I am not sure John knows what it means, that definition he posted is misleading, and doesn’t related to the 27% profit margins from his other post.

In the case of Woolworths and most businesses, Gross profit is simply “ “ revenue” minus the “ “cost of goods solds (COGS)”

So if Woolies buys a mars bar for $1 and sold it $1.50, they make a “Gross profit” of $0.50 or 33%.

But from that $0.50 gross profit, you have to deduct wages, rents, energy bills, equipment costs/depreciation etc etc etc.

Once you deduct all the other costs, you are left with Net profit, then you deduct the tax and you get Net profit after tax, which is about 2.5% of total sales.

 

[mullokintyre]

Seriously? I know it’s Sunday but you can’t do your own research?

Gross profit is the total profit a company makes after deducting its costs, calculated as total sales or revenue minus the cost of goods sold (COGS), and expressed as a dollar value. Gross profit margin is the profit a company makes expressed as a percentage.​

Gross Profit Margin: Formula and What It Tells You

The gross profit margin is a metric used to assess a firm’s financial health and is equal to revenue less cost of goods sold as a percent of total revenue.

www.investopedia.com

If you get paid by the ABC, Gross Profit can mean whatever you want it to.
Just ask Emma Alberici.
Mick

 

[divs4ever]

If you get paid by the ABC, Gross Profit can mean whatever you want it to.
Just ask Emma Alberici.
Mick

WHAT ??

the official Government narrator makes MISTAKES ( that they admit to )

goodness me are they trying to give me a heart attack

( or is it the new Government shock therapy )

 

[systematic]

Woolworths for example make less than 3cents of profit after tax on each $1 of sales.

10%-12% is pretty good for most businesses it’s certainly good in the cafe business, I guy a know used to own a successful cafe, and he was doing very well, I went over his numbers with him and he was trying to get his profit margin up to 15%, which he saw as the ultimate goal.

Yeah, 15% considered huge in that industry.

When I worked in an area that required food industry knowledge, I was taught the (classic, I found out) 30/30/30/10 rule (expense-profit model) in the restaurant industry.

30% COGS, 30% wage costs, 30% other operating costs...10% Net profit. Tough times even tighter. Every bit counts (food wastage, menu engineering...).

Someone above mentioned fish n chip shop/ takeaway shops. Their average Net is above the average restaurant.

 

[Value Collector]

Yeah, 15% considered huge in that industry.

When I worked in an area that required food industry knowledge, I was taught the (classic, I found out) 30/30/30/10 rule (expense-profit model) in the restaurant industry.

30% COGS, 30% wage costs, 30% other operating costs...10% Net profit. Tough times even tighter. Every bit counts (food wastage, menu engineering...).

Someone above mentioned fish n chip shop/ takeaway shops. Their average Net is above the average restaurant.

Yep, I remember him saying that what ever the cost of the ingredients are, he multiples that by 4 to decide roughly what should charge for the dish, then after all other costs was netting about 12%, hoping to get to 15% if he ran everything well.

 

[Value Collector]

If you get paid by the ABC, Gross Profit can mean whatever you want it to.
Just ask Emma Alberici.
Mick

Yeah, a business does have a level of freedom to decide what is included in gross profit, in retail it’s pretty well accepted that gross profit is just revenue minus the cost of goods sold.

But, it can get pretty blurry in a business like a movie studio for example. But you can generally find all the answers you need in the notes to the financial statements.

 

[JohnDe]

If you get paid by the ABC, Gross Profit can mean whatever you want it to.
Just ask Emma Alberici.
Mick

And don't forget the accountants work, especially those large corporate businesses. Purchase some land for a new project and down goes your profit. Or buy a loss-making business and there is another loss for the year. Donate to your favourite art gallery/Library/museum/build project, nice.

Creative accounting, all legal and beautifully presented to fool most fools.