Then people who say that the gross profit margin of the business is 200% and 300%, I beg you not to show the lower limit. Gross margins are unlikely to exceed 100%.
Gross profit margin in accounting = (sales revenue - cost of sales) / revenue * 100%, in the simplest words, that is, (selling price - purchase cost) / selling price * 100%.
As long as your elementary school arithmetic is not the physical education teacher's, as long as there is a purchase price and cost of goods or services, the denominator will always be greater than the numerator, and the gross profit margin will always be less than 100%
There's only one unlikely scenario where the cost or purchase price is negative, but in real life, I haven't really seen it. Maybe I know less, if you know that the cost is negative (that is, you purchase the manufacturer not only does not want money, but also gives you money; You ask the employee to pay you back without paying the employee), please type in the comments section.
If you have not been in contact with business or engaged in related work, it is normal to think that the gross profit margin can be > 100%, after all, the art industry has a specialty.
The terrible thing is that those pseudo-business mentors (people who teach others about business models) can't even figure out the most basic accounting concepts, let alone make budget statements and read financial reports. See the "business mentor" who says that the gross profit margin is > 100%, please directly block, don't let this kind of person mislead everyone anymore.
