Difference between revisions of "Gross Margin"
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(Explaining Gross Margin and its difference from Markup) |
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| − | + | The '''gross margin''' is the [[profit]] resulting from deducting the cost of a [[good]] from its selling price. It should not be confused with mark-up. If a good with a cost of $75.00 is sold for $100.00, the gross margin is $25.00 or 25%. The mark-up is $25.00 or 33.3% (25/75). | |
| − | Professional | + | Professional [[accountant]]s and [[economist]]s have many different ways of defining cost, however, that is not the thrust of this brief article. |
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| + | [[Category:Economics]] | ||
| + | [[Category:Accounting]] | ||
Latest revision as of 13:41, July 13, 2016
The gross margin is the profit resulting from deducting the cost of a good from its selling price. It should not be confused with mark-up. If a good with a cost of $75.00 is sold for $100.00, the gross margin is $25.00 or 25%. The mark-up is $25.00 or 33.3% (25/75).
Professional accountants and economists have many different ways of defining cost, however, that is not the thrust of this brief article.
