Gross Profit Margin

Gross Profit Margin is an intermediate — but critical — measure of the profitability and efficiency of the company’s core business. Calculating profit as a percentage of revenue makes it easier to analyze profitability trends over time and to compare profitability with other companies. Gross profit margin is usually expressed as a percentage.

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Formula

Gross Profit Margin = (Net sales – Cost Of Goods Sold) / Net sales x 100


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