Gross Margin Definition & Application Wiki

Gross Margin Definition & Application Wiki

Last Updated by WikiWealth

Short Definition

Gross profits as a percentage of revenue. Gross profits equal revenue minus cost of goods sold.

Gross margin can be defined as the amount of contribution to the business enterprise, after paying for direct-fixed and direct-variable unit costs, required to cover overheads (fixed commitments) and provide a buffer for unknown items. It expresses the relationship between gross profit and sales revenue.

Long Definition

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