Describe how managers of Amazon might use the gross margin to evaluate current operations.

Question

Question

business accounting

Answer 1

Answer #1

Gross Margin = Sales Revenue - Cost of Goods Sold

Gross margin can be termed as excess of sales revenue over the direct cost involved in producing/purchasing the goods and services.

Generally Gross margin is used to measure how the company's production costs relate to their revenues.

Gross margin if falling, the company needs to find a way to Decrease the direct costs such as materials and labor to keep operating.

Answer 2

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