Company Health
What is Gross Margin?
Revenue left after subtracting the direct cost of making the product
Full Explanation
Gross margin = (revenue − cost of goods sold) ÷ revenue. It shows how profitable the product itself is before operating costs.
Real-World Example
Sell a widget for $100, costs $40 to make → 60% gross margin.
Pro Tip
Software companies often have 70–80% gross margins. Physical goods are much lower.
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