Gross Margin

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Definition: Gross Margin

Gross margin can be calculated as a company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage.

It is instrumental in deciding the value of incremental sales and taking some major pricing and promotion decisions.

E.g. If I sell a pen for 100/- which I bought for 80/-, then my gross margin % would be 20%.

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