Gross Margin

A company's Gross Margin is a good indicator of 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 indicator 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 as follow:

(Net Sales - Cost of Goods Sold) / Net Sales