what is gross margin? Is this different from profit margin and gross profit?
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I highly recommend you start to use google and investopedia for questions like these (not that we're not happy to help!).
Straight from Investopedia:
- Gross profit describes a company's top line earnings; that is, its revenues less the direct costs of goods sold.
- The gross profit margin then takes that figure and divides it by revenue to get a handle on how much gross profit is generated on a percentage basis after taking costs into account.
- Both of these differ from net profit or net profit margin in that net deducts several other indirect costs and expenses not found in the gross profit.
Hi there:
- Gross profit = Net Sales – COGS
- Gross profit margin = (Net Sales – COGS) / Net Sales)
Hope this helps,
Francesco
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