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Gross Margin
Gross margin is one of the most fundamental measures of business profitability. It tells us how much money a company keeps from its sales after covering the direct costs of making goods or delivering services. By focusing on the portion of revenue that remains after accounting for production expenses, gross margin provides insight into efficiency…
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Gross Margin vs Contribution Margin: A Complete Guide to Understanding the Difference
When people talk about how profitable a business is, two common terms often come up: gross margin and contribution margin. Both are used to measure profitability, but they do so from different perspectives and for different purposes. Gross margin takes a broad look at how much profit a company makes after accounting for the cost…