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Gross Margin

Revenue minus COGS, divided by revenue.

Gross margin measures the percentage of revenue retained after subtracting the direct cost of goods sold. It reflects pricing power and production efficiency. Gross margins vary widely by industry — software companies often exceed 70%, while retailers may be below 30%.

Formula
Gross Margin=Revenue−COGSRevenue\text{Gross Margin} = \frac{\text{Revenue} - \text{COGS}}{\text{Revenue}}

Related Terms

Operating Margin

Operating income divided by revenue.

EBITDA Margin

EBITDA divided by revenue (TTM).

Net Margin

Net income divided by revenue (TTM).