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Financial statements
Gross margin
Revenue less cost of sales, as a share of revenue. What is left to cover everything else after the direct cost of delivering what was sold.
Owned by: Entry analystTest band: Entry analyst
The formula
Gross margin % = (Revenue − COGS) ÷ Revenue
In practice
Watch it by product line, not just in total. A blended margin hides the line that is carrying the others.
The kind of thing the test asks
- Revenue $800k, cost of goods sold $480k, operating expenses $200k. What is gross margin?
More in financial statements
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