Gross Profit Margin- Meaning, Formula, Calculation & Interpretations

This step by step tutorial explains the fundamental concepts you should know about Gross Profit Margin, including its formula, calculations and interpretations. The tutorial also covers how to calculate the Gross Profit Margin in Excel using the Colgate Case Study.
You can download the Colgate Gross Profit Margin template from this link - https://www.wallstreetmojo.com/ratio-...

What is Gross Profit Margin?
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Gross Profit Margin is a percentage of sales ratio that determines a company's profitability after deducting direct costs of goods sold from revenue.

Formula
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Gross Profit Margin Formula = Gross Profit / Revenue

Uses
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- Calculating the gross profit margin is useful for investors because it allows them to easily compare the company to others in its industry.
- Investors can determine whether the target company's gross profit is healthy or not by comparing the gross profit percentages of companies in the same industry.

For more details, you can refer to our article - https://www.wallstreetmojo.com/gross-...

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