Gross Margin (GM)

Revenue minus cost of goods sold, expressed as a percentage of revenue

FORMULA

Gross Margin % = ((Revenue - Cost of Goods Sold) / Revenue) × 100


Alternate Calculations

Gross ProfitRevenue - Cost of Goods Sold
As RatioGross Profit / Revenue

What is Gross Margin?

Gross Margin measures the percentage of revenue retained after paying for the direct costs of producing goods or services. It reflects how efficiently a company produces its products and is a key indicator of pricing power and production efficiency. Higher gross margins indicate better profitability at the production level and are critical for evaluating unit economics.

Chart

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700,000revenue · JunGross Margin
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Sample Data

monthrevenuecogsmargin
Jan500,000300,00040
Feb525,000310,00041
Mar575,000330,00043
Apr600,000345,00042
May650,000368,00043
Jun700,000385,00045

Required Data Columns

RevenueCost of Goods Sold