Gross Margin: Definition, Example, Formula, and How to Calculate
Gross margin is a key measure of a company's profitability and financial health, calculated as the percentage of revenue left after subtracting the cost of goods sold. It helps companies make strategic decisions, assess efficiency, and increase profits. When a company's gross margin drops, it may indicate the need to make cost-cutting measures or source cheaper supplies. However, it should be considered along with other financial metrics to get a complete view of a company's performance.
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