Gross Profit Margin

Your business gross profit margin is a measure of how well you are managing all the costs associated with your cost of sales – different industries have different expectations of adequate gross profit margins. For instance, a business such as a supermarket, may work on smaller margins than a services type business. If you find gross margins reducing, this could indicate either that you are having to discount to win business or alternatively, your direct costs (stock, labour etc) is rising. This can be confirmed with another measure in Jazoodle, COGS : EBITDA which measures the proportion of your input costs to overall profitability