Gross Margin

Gross margin measures revenue left after direct costs or cost of goods sold.

Gross margin measures how much revenue remains after direct costs or cost of goods sold. It is one of the clearest indicators of pricing power and delivery efficiency.

Formula

Gross margin = (Revenue - COGS) / Revenue

Gross margin affects CAC payback, EBITDA margin, and the amount a company can invest in growth. Compare sector ranges in gross margin by industry.

Related calculator: Gross Margin Calculator.