What is it?
Gross profit is a company’s net sales minus its cost of goods sold (COGS). A firm’s gross profit margin is gross profit divided by sales expressed as a percentage.
Who is interested?
The financial community and investors.
What does it tell me?
The gross profit margin represents the amount of sales revenue that the company retains after incurring the direct costs associated with producing the goods and services it sells. The higher the amount, the more the company retains on each dollar of sales to service its other costs and debt obligations.