Average Gross Profit Margin is a measure of a company’s profitability that assesses how efficiently each dollar of revenue is used to generate profit. It provides insight into the amount of revenue that remains after the cost of goods sold is taken into account. By understanding their Average Gross Profit Margin, businesses can identify areas of operational inefficiency and formulate strategies to increase profits and grow their bottom line. A strong Average Gross Profit Margin is an indication that a business is efficiently using its resources to maximize its income.