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Last updated 2:45 AM on 3/9/26
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4 Terms
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Gross Margin Ratio
A financial metric that shows the relationship between gross profit and net sales.
2
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Formula for Gross Margin Ratio
Gross Margin Ratio = Gross Profit / Net Sales.
3
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Alternative Formula for Gross Margin Ratio
Gross Margin Ratio = (Net Sales - Cost of Goods Sold) / Net Sales.
4
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Gross Profit Calculation
Gross Profit = Net Sales - Cost of Goods Sold.
