... has its cost of sale increased, do they need to worry? No- because the sales turnover has dramatically also increased in the cost of sales was almost certain. Yes- the cost of sales has been increasing at a faster rate then the sales turnover. One-way is to find what happened t turnover in relation to cost of sales is to calculate the RATIO OF GROSS PROFIT TO SALES TURNOVER OR GROSS PROFIT MARGIN. = Gross profit *100 Sales turnover If the gross point margin increases, costs of sales must be falling in relation to the value of sales. It is usually a good indicator for a business. If the ratio is falling, sales costs are rising in relation to the value of sales and this could be a worrying trend for a business. Gross profit is important, but it does not include overhead costs. For the owners of ...

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