← Business Dictionary
Finance

Gross Margin

The share of each sale left over after the direct cost of making it — before overheads. Higher margins give you more room to grow.

Example

Selling for ₹800 with ₹300 COGS is a 62.5% gross margin.

Formula

Gross Margin = (Revenue − COGS) ÷ Revenue × 100

Related terms

P&L
A summary of your income and expenses over a period that shows whether you made a profit or a loss. Also called the income statement.
EBITDA
A measure of a company's core operating profit, before accounting effects like interest, tax and asset write-downs. It shows how the business does at its heart.
COGS
The direct cost of producing what you sell — materials, manufacturing, delivery. Not overheads like rent or salaries of non-production staff.

Building a startup?

Base 91 Hub takes founders from idea to launch — tracker, community, AI toolkit and this dictionary, built in.

Create your account