Gross Margin: A Financial Metric for Operational Efficiency and Strategic Decision-Making

Gross margin is the percentage of revenue remaining after subtracting the cost of goods sold (COGS), serving as a key indicator of operational efficiency and pricing power. The article explains how to calculate gross margin, why it varies by industry, and how business leaders can use it strategically for pricing, cost management, and growth planning. Improving gross margin requires both cost discipline and pricing strategy tailored to specific business models.