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The Gross Margin is a good indicator of the how expensive it is to make a product. Although gross margin might be very different across industries, it is a good indicator of efficiency within an industry. Higher gross margins may also be an indictor of brand loyalty or a trade advantage. To make comparisons between companies, gross margin is usually expressed in terms of a percentage. The calculation for gross margin is: (Net Sales - Cost of Goods Sold) / Net Sales |
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