Gross Profit Margin is a financial ratio that shows the percentage of profit made after subtracting the cost of producing and selling a product or service. It is essentially the ratio of gross profit to total revenue earned, expressed as a percentage. In other words, it is a measure of how efficiently a company is making money off its products or services. Therefore, having a high Gross Profit Margin can indicate that a business is running at maximum efficiency and profitability. On the other hand, a low margin may be an indication that the company needs to examine its production methods in order to reduce costs and improve profitability.
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