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What is Gross Profit Margin as a business KPI?
in Business Analytics by Platinum (104k points) | 10 views

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Gross Profit Margin puts the direct costs of producing products or services (also referred to as costs of goods sold) in relation to sales revenue to establish how efficient a company is in producing its goods or services.

 

For example, a gross profit margin of 20% indicates that for each dollar in sales, the company spent eighty cents in direct costs to produce the good or service that the firm sold.

 

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

by Platinum (104k points)

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