Knowify's profitability calculator updates in real-time based on the material, labor, and subcontractor costs, versus the revenue invoiced to the customer. The calculations for profit use the formula for **Gross Profit Margin**. This formula represents the margin over sales:

*Job Profit Margin = Job Profit / Job Revenue where Job Profit = Revenue - Cost.*

If in the **Customize** section you enable the option of factoring Work-In-Progress (WIP) into job profit calculations, then the formula is adjusted as follows:

*Job Profit Margin = (Job Profit + WIP) / (Job Revenue + WIP)*.

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