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Margin

Margin generally refers to gross margin — the percentage of revenue that remains after subtracting COGS. Formula: Gross Margin = Gross Profit ÷ Revenue × 100

Why It Matters

•Widely used to compare product performance.
•Helps assess pricing and product-level economics.
•Misleading when used alone because it ignores time, turnover, and capital requirements.
•A high-margin SKU may still be financially unattractive if it cycles slowly.

Connection to Capital

Margin must be evaluated together with turnover and capital lock to understand true financial performance.

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