gross profit margin

Definition

The percentage of revenue remaining after subtracting cost of goods sold, revealing how much you make before paying for all the other stuff that keeps businesses running. High margins are good; low margins mean you're working hard to stay broke.

Example Usage

Our 60% gross profit margin looks impressive until you remember we spend 55% of revenue on sales and marketing to acquire customers.

Origin

Profitability metric formalized in early 20th century financial analysis

Fun Fact

Software companies brag about 80%+ gross margins while grocery stores operate on 2-3%, which is why one can afford foosball tables and the other can't.

Source: Financial performance metrics

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