- Calculate the Gross Profit and Gross Profit Percentage for this year and last year, creating a small table, such as the following:
Cost of Goods Sold
Gross Profit Percentage
In the example above, sales decreased, gross profit increased, and the gross profit percentage increased. Therefore, sales are more profitable. We made 33 cents of gross profit on every dollar of sales this year, but only 14 cents of gross profit on every dollar of sales last year. Sales decreased, but sales are actually generating more profit overall, both as an absolute dollar value and as a percentage.