Example: Calculation of the gross margin
The latter are determined with a profit and loss account. The balance of turnover and expenses results in the gross margin. The acronym "COGS" comes from the English language and stands for "Cost of Goods Sold":
The percentage value of the gross margin can be calculated with the following formula:
Gross margin (%) = Gross profit/ Sales revenue* 100= x %.
Case study: A car manufacturer had an annual turnover of 1,250,000 EUR. The production costs amounted to 650,000 EUR. This results in a gross profit of 600,000 EUR. (1,250,000 EUR - 650,000 EUR = 600,000 EUR)
Gross Margin (%) = 600.000 EUR/ 1.250.000 EUR* 100= 48 %
Points to note for comparison and the limits of the formula from Exness Thai
สําหรับการเปรียบเทียบกับ บริษัท อื่น ๆ - ตัวอย่างเช่นเพื่อให้มีประสิทธิภาพเกี่ยวกับผู้ผลิตรายอื่น - เป็นสิ่งสําคัญที่จะต้องใส่ใจกับประเด็นสําคัญ. เนื่องจากการเปรียบเทียบใน โหลด mt4 exness นั้นไม่ใช่เรื่องง่ายเนื่องจากความซับซ้อนของโครงสร้าง บริษัท. อัตรากําไรขั้นต้นสามารถตีความได้หลายวิธีและในแง่นี้มีอุตสาหกรรมจํานวนมากที่มีต้นทุนการผลิตแตกต่างกันไป.
For the comparison with other companies - for example, to put efficiency in relation to other producers - it is important to pay attention to important aspects. Because a comparison is not that easy due to the complexity of company structures. The gross margin can be interpreted in different ways and in this respect there are numerous industries whose production costs vary. A comparison should therefore be made within a sector. A cross-industry comparison of figures would not allow a useful comparison or would distort or falsify the significance of the gross margin.
Some industries are obliged to invest immense sums in their production to get certain goods ready for sale. This is the case in the car industry, for example. The gross margin is correspondingly lower due to the financial resources that go into production. Service providers can have a larger gross margin in this respect because there are no production costs. A comparison in such cases would not be purposeful and would be disproportionate. It would also not be a good basis for decision-making in future investments.
Some external factors
External factors over which company owners have no influence can also make a company's efficiency appear in a negative context. However, this is not synonymous with failure because certain fluctuations in value are due to price increases, such as inventory costs. Political events can also influence companies, although this says nothing about the competitiveness of the company.
This is where the formulas reach their limits. This is because the gross margin only reflects a numerical value, whereby the exact origin of a fluctuation can only be understood by outsiders to a limited extent. Shareholders can fall back on ad hoc news in order to be able to understand fluctuations to a certain extent. This is because listed companies are subject to disclosure requirements. Important information must be published in a factual and transparent manner to inform shareholders about important events. The notices must not contain misleading facts and the like and are checked by the Federal Office of Securities Trading.
Conclusion and conclusion on gross margin
Gross margin is interesting in many respects. Entrepreneurs can assess their profitability and compare themselves with competing producers in order to initiate possible countermeasures to optimise profits. Depending on the industry, the gross margin is located in the lower number segment due to the financial burden that arises as a result of production. Entrepreneurs from the service sector achieve correspondingly larger numerical values. Regardless of the numerical value, a critical examination of the accounts is of elementary importance. This is because the internal processes are subject to possible influencing factors that affect productivity and efficiency. This makes it difficult to interpret a value adequately, especially if important elements are ignored in the calculation.