Calculate your SaaS Gross Margin below by providing your total revenue and cost of goods sold (COGS).
Gross Margin is the difference between revenue and the cost of goods sold (COGS), expressed as a percentage of revenue. It indicates the percentage of revenue that exceeds the COGS.
Gross Margin is calculated by subtracting the cost of goods sold (COGS) from total revenue and then dividing by total revenue. The formula is: Gross Margin = (Revenue - COGS) / Revenue * 100
Gross Margin is important because it shows the profitability of a company's core business activities. A higher gross margin indicates that a company is retaining more revenue per dollar of sales, which can be used to cover other expenses and profit.
Some strategies for improving gross margin include reducing COGS through cost efficiencies, increasing revenue through pricing strategies, and improving sales volume. SaaS companies can also focus on high-margin products and services.