Gross Margin Formula



1
In wikipedia and investopedia they have given the formula for gross margin as (Revenue – Cost of goods sold) / Revenue. But the formula that is provided in the video is Revenue – Cost of goods sold. Could u please tell me which is rightly to be used.

1 Answer(s)


1

There are 2 terms here. Gross Profit and Gross Margin
Gross Profit is a number and the formula is Revenue - COGS
Gross Margin is the % and the formula is (Revenue-COGS)/Revenue