Gross Margin

Gross margin is calculated by dividing gross profit by sales revenue. This indicator shows the percentage(margin) of your sales revenue that is gross profit.

Gross margin and gross profit are closely related: if you deduct cost of goods sold from sales revenue, you have gross profit. After that, if you divide gross profit by sales revenue, you have gross margin.

To maximize the insight you receive from this indicator, calculate it individually for each market segment. Use the findings to evaluate your company's market positioning.

Parameters

Calculation: grossMargin = grossProfit / salesRevenue

Example: grossMargin = 11 600 / 52 000 ≐ 0,223

Unit: Number