Gross margin

#14
GUIDING QUESTION

How much value do you add after paying suppliers?

The first sign of competitiveness.

01.What it is

Difference between sales and supplies, relative to sales.

02.Component masses

  • Sales
  • Supplies

03.Formula

MAIN FORMULA
Gross margin (%): (Sales − Supplies) ÷ Sales

04.Interpretation

  • High → a lot of added value.
  • Low → price pressure or dependence on suppliers.

05.Related to

  • Operating margin
  • Net margin
  • ROA/ROE