Short Definition

Gross profits as a percentage of revenue. Gross profits equal revenue minus cost of goods sold.

Gross margin can be defined as the amount of contribution to the business enterprise, after paying for direct-fixed and direct-variable unit costs, required to cover overheads (fixed commitments) and provide a buffer for unknown items. It expresses the relationship between gross profit and sales revenue.

Long Definition

See also:

• Gross Profit

See Related Analysis

• Gross Margins

See Related Resources

• Income Statement
• Cash Flow Statement
• Balance Sheet Model

Source: http://en.wikipedia.org/wiki/Gross_margin