Gross Margin is a financial metric that measures the revenue a startup generates after accounting for the Cost of Goods Sold (COGS).

It represents the difference between the revenue generated from the sale of a product or service and the direct costs associated with producing or delivering that product or service.

To calculate Gross Margin

(($) Gross Revenue - ($) Cost of Goods Sold) / ($) Gross Revenue x 100 = (%) Gross Margin

By monitoring Gross Margin, startups can determine the level of pricing and operational efficiency necessary to maintain profitability and make informed decisions about pricing, product mix, and marketing strategy.

A higher Gross Margin is viewed as positive because it indicates a startup is generating more revenue from each sale and can allocate more resources to growth and expansion.