Article · 8 min read

Gross Margin Ratio: formula and example

Corporate Finance Institute · corporatefinanceinstitute.com Free Beginner

A clear explainer of the gross margin ratio with the formula, (Revenue minus COGS) divided by revenue, a worked income statement example and a downloadable template.

  • In CFI's example, (102,007 - 39,023) / 102,007 = 61.74%.
  • Compare gross margin only with companies in the same industry.
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The question it answers

  1. How do I calculate gross margin?

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