gross margin
Revenue minus costs
Gross margin is the difference between revenue and the direct costs of producing what was sold, expressed as a percentage of revenue.
It measures how efficiently a company converts sales into profit before accounting for overhead, marketing, and administrative expenses: Their gross margin improved when they found a cheaper supplier.
A high gross margin means more money left over from each sale to cover other costs.
Direct expenses for inventory sold
- direct costsCosts traceable to production
- variable costsExpenses changing with output
- fixed costsExpenses unchanged by output
- indirect costsExpenses not directly attributable
overhead · labor costs · production costs · cost structure · unit cost · cost reduction · cost control · manufacturing costs
Added percentage for profit
- profit maximizationPursuing greatest possible gains
- bottom lineEssential point or conclusion
Method for determining costs
- price pointSet retail cost level
- competitive pricingPrices set against competitors
- pricing powerControl over what you charge
- promotional pricingTemporary cost reductions for marketing
Measuring against top performers
- trend analysisExamining directional data shifts
- comparative analysisSystematic comparison of subjects
- financial metricsNumerical business performance measures
cost of goods sold
Direct expenses for inventory sold
- direct costsCosts traceable to production
- variable costsExpenses changing with output
- fixed costsExpenses unchanged by output
indirect costs · overhead · labor costs · production costs · cost structure · unit cost · cost reduction · cost control · manufacturing costs · cost efficiency
markup
Added percentage for profit
- profit maximizationPursuing greatest possible gains
- bottom lineEssential point or conclusion
pricing strategy
Method for determining costs
- price pointSet retail cost level
- competitive pricingPrices set against competitors
- pricing powerControl over what you charge
promotional pricing · pricing model · wholesale price · retail price
benchmarking
Measuring against top performers
- trend analysisExamining directional data shifts
- comparative analysisSystematic comparison of subjects
- financial metricsNumerical business performance measures
- business financeaccounting, balance sheet, revenue stream, budget, net profit
- business termsfranchising, revenue stream, board meeting, markdown, subsidiary
- financebank, CFO, banks, controller, finance
- financial termswealth, asset, currency, balance sheet, audit
- earningsearnings, earnings per share, income, earnings call, gains
- marginsborder, edge, fringe, periphery, gutter
gross marginnet profit
Income after subtracting costs
net income · net margin · operating profit · bottom line · EBITDA
gross, margin, marginal, margins, grossness, marginalize, grossly, grossed, grossing