gross profit margin

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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 the example, there's a marked impact on gross profit margin caused by the separation of unutilized capacity.
Table 1: REVENUE GROWTH-ORGANIC AND INORGANIC DESCRIPTION ESTIMATES 2017 BUDGET 2018 A B Revenue 1,000 1,100 Cost of Sales -650 -710 Gross Profit 350 390 Operating Expenses -150 -160 Financial Costs -15 -17 Taxes -20 -25 Net Income 165 188 Gross Profit Margin 35% 35.
The issue with conventional budgets is that cost of sales is presumed to be fully variable, and management generally expects gross profit margins to remain stable.
Now let's say that the owner fails to closely manage his gross profit margin and, either through a rise in cost of goods or a lowering of the price they get for their products or services, gross margin dips from 40% to 34%.
Without a healthy gross profit margin, bottom line profit is almost impossible.
A small erosion in gross profit margin can wipe out bottom-line profit.
Worker shortage will cause Ability to see gross profit margin drop to under 10%, with Altek to register a 13% gross profit margin in the first quarter of this year.