Gross Profit Margin
Enter your email address to recieve your KPI 101 lessons
Formula
(Revenue – Cost of goods sold) / Revenue
Services
Role
C-Level, VP / DirectorThe Gross Profit Margin KPI measures how much profit you make on each dollar of sales before expenses. This ratio is calculated by looking at the difference between production costs (excluding overhead, payroll, and taxes). It is important to note that gross profit margin isn't a true indicator of whether your business is marking a profit – for that you will need to refer to another financial KPI: Net Profit Margin.
