Gross margin percentage is a measure of how high a markup a company is charging on the products it sells.

Question

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Gross margin percentage is calculated by subtracting the cost of goods sold (COGS) from the revenue, and then dividing the result by the revenue. This calculation provides an indication of how much profit the company is making on its products, relative to the cost of producing and selling them. In other words, it measures the percentage of revenue that is left after taking into account the direct costs of making the product. Therefore, a higher gross margin indicates that the company is charging a higher markup on its products, while a lower gross margin indicates a lower markup.

Gross Margin Percentage Is a Measure of How High a Markup