What Is Gross Margin?
Gross margin is the percentage of revenue that remains after subtracting what the goods cost you — the number that lets you compare profitability across products at completely different prices.
Direct answer
Gross margin is the percentage of your revenue that remains as gross profit — after subtracting what the goods cost you, but before anything else. It turns a cedi amount into a percentage you can compare across products of completely different prices.
Gross margin is a standard analysis ratio built from revenue and gross profit — both formally defined in the IFRS Foundation's Glossary, though the margin percentage itself is a management/analysis calculation rather than a reported financial-statement line item.
The same padlock: bought for ₵80, sold for ₵100.
| Gross Profit | ₵20 |
| Revenue | ₵100 |
| Gross Margin | 20% |
Why a percentage matters more than the cedi amount
₵20 of profit sounds the same whether it came from a ₵100 sale or a ₵1,000 sale — but a 20% margin and a 2% margin are very different businesses. Margin lets you compare a padlock to a bag of cement to a tin of paint, even though they sell at completely different prices, on the same scale.