What is Gross Margin? How is it calculated?

[Good-Person]

Gross margin is the profit generated by a company. This also includes money which may be left over after you deal with all of your expenses. Gross margin is used in many financial reports. So, do you think that gross margin includes any other thing as well? How is it calculated?

 

[Debashis]

Gross margin does not include all expenses, only the direct costs of producing goods or services. It is calculated by subtracting the cost of goods sold from the total revenue and dividing by the total revenue, then multiplying by 100 to get a percentage.

Gross Margin = ((Total Revenue - Cost of Goods Sold)/Total Revenue) x 100