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Gross Margin

What is gross margin?

Gross margin describes your business' top line earnings. It's your gross sales minus the cost of goods sold (COGS): Gross Sales - COGS. Gross margin is calculated before you subtract operational costs.

How can I use my gross margin?

Gross margin is useful in calculating the full picture of how well your business is performing financially. Once you have your gross margin calculated, you can start calculating your gross margin rate, gross profit margin and myriad other metrics.