### FRGrossProfitMargin (GrossProfit, Sales)

Basic and Crystal syntax.

##### Format

`FRGrossProfitMargin(GrossProfit, Sales)`

##### Arguments

- GrossProfit is a Number or formula. In general, GrossProfit equals sales minus cost of goods sold in a company's income statement.
- Sales is a Number or formula. Sales is the total sales during the period that appears in a company's income statement.

##### Action

FRGrossProfitMargin returns the ratio between GrossProfit and Sales (for example, GrossProfitMargin = GrossProfitMargin / Sales).

##### Typical uses

This is a measure of how much return is received from the sales of goods prior to deducting all other expenses. The result varies from industry to industry depending on accounting treatment of cost of production that is included in cost of goods sold.

##### Examples

The following examples are applicable to both Basic and Crystal syntax:

`FRGrossProfitMargin(3.4, 50)`

Returns 0.068.

`FRGrossProfitMargin(36.15, 120.5)`

Returns 0.3.

Note: None of the arguments can be negative; you may have to check for negative values before passing the arguments.

##### Comment

FRGrossProfitMargin is one of the many financial analysis tools used in interpreting the financial position of a company. As in the case of all ratios, it has to be used with caution. It can just be used as a clue and not solid proof for forming a judgment on the financial status of a company.

Neither one of the ratios can be used alone for doing financial analysis and there are no fixed rules on the results of the ratios. Apart from differences between type of industries, result varies among different companies within the same industry and within different account periods. The results should only be used for relative comparison and trend analysis, rather than treating them as something absolute.

Seagate Software, Inc. http://www.seagatesoftware.com Please send comments to: techpubs@seagatesoftware.com