Marketing KPI Quiz

Gross margin represents the percentage of total sales revenue that a company keeps as gross profit after deducting the costs directly related to producing the goods or services sold. You can calculate gross margin by subtracting the cost of goods sold from the total sales revenue and then dividing by the total net sales. For example, a company with a gross margin of 40 percent retains $0.40 for every dollar of revenue it receives. You can calculate gross margin not only for your whole company but also for each product line, which is where this figure is especially valuable.