Glossary
Gross margin is revenue minus cost of goods sold expressed as a percentage of revenue, measuring how efficiently a company produces its products or services.
Gross margin is revenue minus the cost of goods sold, expressed as a percentage of revenue. If a company sells $100 of product that cost $40 to make, its gross margin is 60%. It captures how much of each sales dollar survives after the direct cost of producing what was sold.
Gross margin is one of the cleanest signals of pricing power and production efficiency, and its direction over time often matters more than its level. A widening gross margin is one of the nine criteria in the Piotroski F-score.
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