In your Ezus software, you can retrieve different information about your margins:
1. Gross Margin = Selling Price including VAT - Buying Price including VAT
This is the first step to ensure its profitability, or even to allow it to set its sales prices or negotiate its purchase prices with its suppliers.
2. Net Margin = Gross Margin - VAT on Margin
The Net Margin is more accurate for calculating true profitability following the deduction of the tax charges related to the specific regime from the margin.
To find out more: How is VAT on Margin calculated?
3. Gross Margin Rate = (Gross Margin / Selling Price) x 100
The gross margin rate works on the selling price.
🚨 Caution, in the tourism sector it is often used a commercial coefficient on the purchase price.
For example: to sell x1.2 its purchase price is not to have a margin rate at 20%.
4. Global Margin = Net Margin + Commissions
This is to calculate the amount you will earn on this project taking into account deductions and retro-commissions via your suppliers.