Gross margin

 

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Gross margin

The difference between the selling price of an item and the purchase or manufacturing cost, expressed as a percentage of the selling price.For example, if it costs a company £6 to manufacture an item and the selling price is £10, the gross margin is:(£10 - £6) / £10 x 100 = 40%When looking at a company's Report and Accounts, the gross margin of the business as a whole is its turnover less the cost of sales, divided by the turnover, multiplied by 100.For example: (£2,000,000 - £1,200,000) / £2,000,000 x 100 = 40%



Similar Matches

Operating margin

Operating margin

The Turnover of a company (its sales) minus direct costs and overheads.


Contribution margin

Contribution margin

The difference between variable revenue and variable cost.


Marginal revenue product

Marginal revenue product

The additional revenue generated by the extra output from employing one more unit of a factor of production. In a competitive industry this equals the marginal value product, but with imperfect competition it is smaller, due to the implied price reduction. Determines factor prices in competitive factor markets.


Net profit margin

Net profit margin

Net income divided by sales; the amount of each sales dollar left over after all expenses have been paid.


Marginal propensity to save

Marginal propensity to save

The fraction of a change in income (or perhaps disposable income) that is saved.


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