ENTREPRENEURSHIP

Detailed explanation-1: -(Revenue – Cost of goods sold)/Revenue = Sales margin The common pitfall of calculating sales margin is failing to factor in all of the costs that go into making and selling the item when determining the “cost of goods sold” field.

Detailed explanation-2: -Gross margin as a percentage is the gross profit divided by the selling price. For example, if a product sells for $100 and its cost of goods sold is $75, the gross profit is $25 and the gross margin (gross profit as a percentage of the selling price) is 25% ($25/$100).