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What does a gross profit margin of 20% mean?

Asked 3 years ago

I am currently doing a case study that spins a story about a business that recycles waste from homes and has started generating a gross profit margin of 20%. What does this mean?

Gross profit margin Gross profit calculation Profit tracking E-commerce business

Payton Lynn

Thursday, February 10, 2022

The gross profit margin shows how much profit a business makes after paying its Cost of Goods Sold(COGS).  Click here to know more about gross profit margin. 
A 20% gross profit margin means that for every $1 of revenue the business gets $0.2 0 as gross profit while the $0.80 is used to pay for the COGS.

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