What is gross margin

What is gross margin? Gross Margin or Gross Profit Margin (GPM) is the gross profit margin calculated by dividing gross profit by revenue and then multiplying by 100% to get a percentage. This index shows the gross profit rate that a business achieves from production. Or sales after deducting related direct costs.
This is one of the important indicators assessing health and competitiveness in the market. If the Gross margin index is high, it proves that the business has the ability to generate high profits from investment. On the contrary, if this index is low, investors will have difficulty making profits. And it may be necessary to find ways to increase selling prices or reduce production costs to improve profits.