gross profit margin

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Related to Gross Margins: profit margin, Net Margins

Gross profit margin

Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold.

Gross Profit Margin

A measure of how well a company controls its costs. It is calculated by dividing a company's profit by its revenues and expressing the result as a percentage. The higher the gross profit margin is, the better the company is thought to control costs. Investors use the gross profit margin to compare companies in the same industry and well as in different industries to determine what are the most profitable. It is also called the profit margin or simply the margin.

gross profit margin

A measure calculated by dividing gross profit by net sales. Gross profit margin is an indication of a firm's ability to turn a dollar of sales into profit after the cost of goods sold has been accounted for. Also called gross margin, margin of profit. Compare net profit margin. See also return on sales.
References in periodicals archive ?
In discretionary space, INDU reported profitability decline of 3 percent YoY mainly due to contraction in gross margins, down 297bps YoY to 14 percent.
Adil said although the rupee had gone down nearly 28% since December last year, still the company was able to maintain its gross margins until the earlier quarters.
Capital Cubethen looked at the Gross Margin Trend for Cumulus compared to the three other radio companies.
Firms that sell goods to end users typically have gross margins below 6%.
With those figures in mind, Apple's gross margins may suffer with the iPhone 6 launch believed to be within 2014.
Gross margin improved 15 basis points to 26.6%, while selling, general and administrative expenses were cut by 20 basis points to 72.58% of sales.
The gross margins in service center are stabilizing, which is positive.
"We expect our gross margin to bounce back in the third quarter as our costs continue to fall and demand becomes stronger," said chief financial officer Terry Wang at a Reuters Climate and Energy Summit.
Careful planning and forecasting are important tools so that levels of production and stock are enough to meet demand but not so high that the businesses have to offer a discount on unsold goods or throw out perishable stock after its sell-by-date, as this will also adversely impact gross margins. The sudden change in the economic environment in the Middle East during 2008 and 2009 meant that accurate planning and forecasting has been hugely challenging.
Inventory productivity ratios such as sales per square foot, gross margin return on inventory and gross margin per square foot all decreased.
However, 32% of Trendsetter CEOs reported increased gross margins in the prior quarter, and 18% a decrease, for a net of 14% increasing--similar to the prior quarter.
In practice, that will mean revenues of around $7.6bn to $8.2bn in the second quarter, with gross margins around 60%, plus or minus a couple of points.