Gross Margin

Revenue less the cost of producing what was sold, as a share of revenue. It shows how much of each sale is left to pay for research, selling and overheads, and differences in it between product lines, such as equipment and consumables, often explain more about a business than its blended figure.

Where Gross Margin comes up

SaaS Operating Models: ARR, Sales Capacity, Billings and the Metrics That FollowA subscription business is a stock moved by flows, sold by a team with a capacity, and paid for before it is delivered.Read the guide — 11 min Valuation: How the Methods Fit TogetherThree methods, one question. Learning them separately is why candidates can build a DCF and still cannot say what a company is worth.Read the guide — 11 min Building an Investment ThesisA thesis is not a description of a company. It is a claim about where consensus is wrong, and what will make that visible.Read the guide — 11 min

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Related Accounting terms

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