difference between gross profit margin and operating profit margin
Gross profit margin and operating profit margin are two commonly used measures of profitability. The difference between them is that gross profit margin only figures in the direct costs of production, while operating profit margin takes into account additional costs commonly referred to as overhead.. Gross profit margin is calculated by looking at revenue minus the cost of goods required for production. A simple example is an auto manufacturer. Gross profit margin is what an automobile sells for minus the cost of all the parts, such as engine parts, tires and interior parts, required to build the car. Gross profit margin is expressed as a percentage, arrived at by subtracting cost of goods from revenue, and then dividing that figure by revenue.