a company’s profit from selling goods or services in a particular period before costs not directly related to producing them are taken away.
The software company has $30 million in revenues, 80% gross margin, and 5% pretax profit.
The company analyzed its gross margin to assess profitability.
Improving efficiency can positively impact gross margin.
A higher gross margin indicates a healthier financial position.
Calculating the gross margin ratio is crucial for financial planning.
