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9.20: Gross Margin Percentage

  • Page ID
    45153
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    Learning Objectives

    • Analyze the gross margin percentage of sample retailers

    Gross margin = net sales – cost of goods sold. However, to express this as a percentage, gross margin is divided by net sales (gross margin dollars / net sales). This allows the retailer to assess what portion of sales were spent on COGS to generate the sales and what portion remains to cover operating expenses. That is:

    • 1 – gross margin percent = the portion of sales spent as COGS
    • 1 – (COGS / net sales) = gross margin percent

    Contributors and Attributions

    CC licensed content, Original
    • Gross Margin Percentage. Authored by: Patrick Williams. Provided by: Lumen Learning. License: CC BY: Attribution

    9.20: Gross Margin Percentage is shared under a CC BY 4.0 license and was authored, remixed, and/or curated by LibreTexts.

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