Gross Margin (GM)

Gross Margin (GM)

Gross margin is the difference between revenue and cost of goods sold. Mostly the intended term is Gross margin percentage.

Gross margin is net sales less the cost of goods sold. The gross margin reveals the amount that an entity earns from the sale of its products and services, before the deduction of any selling and administrative expenses. The figure can vary dramatically by industry. For example, a company that sells electronic downloads through a website may have an extremely high gross margin, since it does not sell any physical goods to which a cost might be assigned. Conversely, the sale of a physical product, such as an automobile, will result in a much lower gross margin.

GM = Profit = Revenue - COGS

Gross Profit

Gross profit is a company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Gross profit = revenue - cost of goods sold

Also called "gross margin," "sales profit" and "gross income".

added 7 years ago

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- Gross Margin Percentage (GM %)
- Gross Margin (GM)
- Cost of Goods Sold (CoGS)
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