What is Gross Margin?
A definition of Gross Margin
“Gross margin is the difference between sales revenue and the cost of goods sold (COGS), expressed as a percentage. It shows the percentage of sales revenue remaining after covering production costs.”

Business Glossary > What is Gross Margin?
Examples of Gross Margin in a Sentence:
The company’s gross margin increased this quarter, indicating improved profitability.
A higher gross margin suggests efficient production and cost control.
Comparing gross margins can reveal which companies offer better value.
Why is Gross Margin Important in Business?
Gross margin helps businesses understand their profitability and cost efficiency. By evaluating gross margin, companies can assess their financial health and make informed decisions regarding pricing, production, and cost management strategies.
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Associated Terms
Here are some associated business terms and synonyms for “Gross Margin”:
- Gross Profit Margin
- Gross Profit Rate
- Profit Margin
Apple’s Gross Margin
Apple Inc. consistently maintains a high gross margin, reflecting efficient production and strong pricing strategies. With a gross margin around 38-40%, Apple demonstrates its ability to earn significant profits from its innovative products.
Final Notes on Gross Margin
When analyzing gross margin, consider the following:
- It reflects how efficiently a company is producing goods
- A higher gross margin indicates better profitability
A clear understanding of gross margin helps businesses identify areas for improvement and better price their products.
This has been a definition of Gross Margin meaning.
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