Gross margin
#14GUIDING 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