Gross Profit Margin

Analyzing the Income Statement is done in steps. The first level is to evaluate the Gross Profit Margin; gross profit in relation to sales, as shown in the picture below.  The Gross Profit Margin can be used for trend analysis between different periods (and competitors). 

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Below, see how Gross Profit Margin is built up and how it is impacted. Think about the different processes that are involved.

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