Question

what metric do you feel is most important in indicating success of an inclusive breakthrough for a company? Make your arguments, give explanations, and examples.

Answer 1

GROSS MARGIN

As per my research and assumptions,finally i came up with a solid method for indicating success is gross margin metric.Because, gross margin metric leads a vital role in every firms and it is special.

Gross margin is the one key aspect that i often see entrepreneurs overlook in starting and managing a business is that of gross margin. Gross margin (sales minus direct costs) is what is left over after costs associated directly with the sale of a product or service, such as materials and direct labor, are paid for. This is an extremely important number for every new and small business to manage, as it impacts both the likelihood of reaching breakeven and the amount of profit that is earned beyond breakeven. In other words, it directly impacts risk and return.

Explanation for Gross margin

A Company gross margin that would determine whether the company is able to increase selling prices when costs are increasing or when competitors are reducing prices or expanding their sales efforts. The gross margin of individual products could indicate to management that some products should be promoted more aggressively and some products should be phased out.

Difference between gross margin and profit margin :

Gross margin is the amount or percentage before subtracting the selling, general and administrative, and interest expenses. profit margin is the amount for percent after the selling, general and administrative, and interest expenses are subtracted.

Examples of Gross Margin (Calculation):

A manufacturer sells a product for 3000 rupees and its cost of goods sold ( which consists of its manufacturing costs) is 2100 rupees.Therefore, the product's gross margin is 900 rupees (3000 minus 2100), or 30% of the selling price (900/3000)