gross margin

Gross margin measures a company's financial health by showing the difference between revenue from sales and the cost of producing goods sold. It's expressed as a percentage of revenue and indicates how much money is left over to cover other expenses after accounting for the costs directly tied to production. A higher gross margin suggests the company can retain more profit from each sale, while a lower margin may indicate higher production costs or pricing challenges. This metric is crucial for assessing profitability and operational efficiency in any business.