ECONOMICS

Detailed explanation-1: -The gross profit margin is calculated by subtracting direct expenses or cost of goods sold (COGS) from net sales (gross revenues minus returns, allowances and discounts). That number is divided by net revenues, then multiplied by 100% to calculate the gross profit margin ratio.

Detailed explanation-2: -Sales revenue minus cost of goods sold is a business’s gross profit. Cost of goods sold is considered an expense in accounting and it can be found on a financial report called an income statement.

Detailed explanation-3: -Gross margin is the amount of money a company has left after subtracting all direct costs of producing or purchasing the goods or services it sells. The higher the gross margin, the more money the company is able to contribute to its indirect costs and other expenses like interest.

Detailed explanation-4: -The term gross margin refers to a profitability measure that looks at a company’s gross profit compared to its revenue or sales. A company’s gross margin is expressed as a percentage. Gross profit is determined by calculating gross sales.

Detailed explanation-5: -Gross Margin is calculated as sale minus cost of goods sold. The cost of goods sold is calculated as beginning inventory plus purchases minus ending inventory. The gross margin is also known as gross profit.