the gross profit rate represents:

http://www.investopedia.com/terms/g/gross_profit_margin.asp#axzz1mVnRMx52

Gross profit rate is gross profit multiple by 100 divide by net sales

The gross profit rate represents the percentage of revenue that remains after deducting the cost of goods sold (COGS).

To calculate the gross profit rate, you need two financial figures: net sales/revenue and COGS.

The formula to calculate the gross profit rate is:
Gross Profit Rate = (Revenue - COGS) / Revenue

Here's how you can find the necessary figures to calculate the gross profit rate:

1. Determine the revenue: Revenue represents the total income generated from the sales of goods or services. You can find it on a company's income statement or financial statement. Look for the line item labeled "Net Sales" or "Revenue." It represents the total amount of money earned from the sale of products or services before any deductions.

2. Calculate the COGS: The cost of goods sold (COGS) is the expense directly related to the production or acquisition of the products sold. It includes the cost of raw materials, direct labor, and other direct costs. You can find the COGS on the income statement as a separate line item. If it is not explicitly mentioned, you can subtract the cost of goods sold from the total costs to find it.

3. Plug the values into the formula: Once you have the revenue and COGS figures, plug them into the formula mentioned earlier:
Gross Profit Rate = (Revenue - COGS) / Revenue

For example, if a company has a revenue of $500,000 and COGS of $200,000, the calculation would be:
Gross Profit Rate = ($500,000 - $200,000) / $500,000 = 0.6 or 60%.

Therefore, in this example, the gross profit rate would be 60%, indicating that 60% of the revenue is retained after deducting the cost of goods sold.