Interpreting gross profit margin is a simple but powerful tool for business owners to measure how well their company is doing. Gross profit margin measures the difference between total revenues – or sales – and what it costs to generate those sales. In other words, it’s a way to gauge operational efficiency and profitability. Gross profit margin reveals how much money you’re making from your products or services after covering all direct expenses related to running your business. The higher your gross profit margin percentage, the more successfully your company is running. So if you want to maximize your profits, focus on increasing your gross profit margin!