BUS1 20 at San Jose State University













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bus120sjsu.com Formula Sheet
Profit Margin = Net Income / Sales Revenue
Sales
– COGS
Gross Profit
Gross Profit Margin = Gross Profit / Sales Revenue
Gross Profit Ratio is the same as Gross Profit Margin
Beginning Inventory
+ Net Purchases
– Ending Inventory
COGS
Beginning Inventory
+ Net Purchases
– COGS
Ending Inventory
Beginning Inventory
+ Net Purchases
Goods Available for Sale (Some professors care about this... some don't)
Sales Revenue
– Sales Returns and Allowances
– Sales Discounts
Net Sales
Purchases
– Purchase Returns and Allowances
– Purchase Discounts
Net Purchases
+ Transportation In
Cost of Goods Purchased