Gross Profit margin

This percentage represents how much of the money earned by a business is directly spent on creating products or providing services. The lower the percentage, the higher the margin, and the more cost-effective the business appears to be. (To calculate a gross profit margin, first take the gross profit from the Profit & Loss [i.e. total revenue minus direct costs/Cost of Goods Sold]. Divide this number by total revenue. Multiply by 100 to show as a percentage.)