A profitability metric calculated by subtracting cost of goods sold from revenue and dividing by revenue, expressed as a percentage. It measures how efficiently a company produces its goods or services before accounting for operating expenses.
'Gross' from Old French 'gros' meaning thick/large (referring to total amount), 'margin' from Latin 'margo' meaning edge or border. The accounting concept developed in early industrial age as businesses needed to separate production costs from other operating expenses.
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