top button
Flag Notify
    Connect to us
      Site Registration

Site Registration

What is the difference between gross profit margin and gross margin in Income statement?

+1 vote
194 views
What is the difference between gross profit margin and gross margin in Income statement?
posted Jul 5, 2017 by Shubham Rajput

Share this question
Facebook Share Button Twitter Share Button LinkedIn Share Button

1 Answer

0 votes

The use of the terms such as gross margin and gross profit margin often varies by the person using the terms. Some people prefer to use gross margin instead of gross profit when referring to the dollars of gross profit. Often they want to avoid the use of the word profit because the selling and administrative expenses must also be covered. Recall that gross profit is defined as Net Sales minus Cost of Goods Sold.

Others use the term gross margin to mean the gross profit as a percentage of net sales. Perhaps the term gross profit margin means the gross profit percentage or the gross margin ratio.

answer Jul 7, 2017 by Chetan Hindu
...