The percentage of revenue remaining after subtracting the cost of goods sold (COGS).

What it Measures ?

How much we keep after making the product.

Relevant StakeHolders 

Finance Team, Product Managers, Sales Heads

In-depth Use Case / Real-world Example

A company that manufactures LED lights sells a product for ₹100 and its COGS is ₹60. The gross margin is (100−60)/100 × 100 = 40%. Gross margin reflects how efficiently a company produces and sells its products. Higher margins mean better profitability, which helps cover fixed costs like salaries, marketing, and R&D.