Keep in mind that some businesses use the term “cost of sales”, but this discussion will stick with the accounting term cost of goods sold.
Note, however, that gross margin does not equal net profit. ($2,080,000 revenue – $1,680,000 cost of goods sold) / ($2,080,000 revenue) = 19.2%įor every dollar of sales revenue, Centerfield generates about 19 cents of gross margin.
