gross profit margin
Học thuậtThân thiện
Definition
Noun: - (Finance): A financial metric representing the percentage of revenue that exceeds the cost of goods sold (COGS). It is calculated as (Net Sales - Cost of Goods Sold) / Net Sales, and indicates the efficiency of a company in producing its goods or the margin available to cover operating expenses.
Usage
The term "gross profit margin" is used to analyze a company's financial health and operational efficiency. It is a key performance indicator (KPI) in business and finance. - It is typically expressed as a percentage. - It is used in financial statements, reports, and analysis.
Examples
- Noun:
- The company's gross profit margin improved to 40% this quarter, indicating better cost control.
- Analysts were concerned about the declining gross profit margin, which suggested rising production costs.
- A high gross profit margin allows a business to invest more in research and development.
Advanced Usage
- "to maintain a healthy gross profit margin": To keep this profitability metric at a strong level.
- The retailer's strategy is to maintain a healthy gross profit margin while competing on price.
- "gross margin analysis": The examination and interpretation of gross profit margin figures.
- The quarterly review included a detailed gross margin analysis for each product line.
Variants and Related Words
- Gross Margin (n): A common synonym for "gross profit margin." The terms are often used interchangeably in finance.
- The gross margin for the fiscal year was above industry average.
- Gross Profit (n): The absolute dollar amount of revenue minus cost of goods sold, not expressed as a percentage.
- The company reported a gross profit of $5 million.
Synonyms
- Gross Margin: The ratio of gross profit to revenue.
- Profit Margin (Gross): Specifying the "gross" type of profit margin.
Related Terms and Contexts
- Operating Profit Margin: A profitability ratio calculated as operating income divided by revenue, which accounts for operating expenses beyond COGS.
- Net Profit Margin: A profitability ratio calculated as net income divided by revenue, representing the final profit percentage after all expenses and taxes.
Noun
- (finance) the net sales minus the cost of goods and services sold