InvoiceBerry Tips for for Freelancers & Small Businesses 9 Most Important Financial Numbers Explained | Page 8

5. Gross Margin
Also known as the gross profit, this is related to your cost
of revenue. It measures how much money is left over after
you’ve subtracted the cost of your merchandise or services. To
calculate it:
Sales price – Cost to produce good/service = Gross Margin
If you are in a competitive market, your margin will be quite low,
but if you have a propreity goods or high quality services, your
margin can be high.