Sales and profit

Gross Margin

The share of revenue left after paying the direct costs of making the products or delivering the services.

Why does it matter?

It shows how much room a company has to pay for everything else, like research, marketing, and salaries, and still make a profit.

How do I read it?

Gross margins differ a lot by industry: software companies are usually high, stores and manufacturers lower. Compare with the company's past and with companies in the same sector.

How StockLab calculates it

(Revenue − Cost of revenue) ÷ Revenue

Example

A company sells $100 of goods that cost $60 to make. Its gross profit is $40, so its gross margin is 40%.

On StockLab

It is in the Advanced View of every company page, with the previous year and the sector median.

Learn moreHow to look at profitability