Series 79: Gross Margin

Gross Margin

Gross margin, also known as gross profit margin, provides information about the relationship between the cost of goods sold and net sales revenue. Gross margin can be expressed as an absolute number, in which case it means the same thing as gross profit. Gross margin is more often and more usefully expressed as a ratio or percentage. Used in this way, gross margin expresses what percentage of each dollar of sales can be used for overhead, debt service, and other expenses not directly related to the production of goods and services.

To calculate gross margin, firs