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Glossary

Financial KPIs

What is gross margin?

Sales minus the cost of the goods sold, as a value or a percentage.

Why it matters: It's the profit the plan is really protecting. Markdowns and overbuying both eat it.

How it's worked out: Gross margin % = (net sales − COGS) ÷ net sales × 100.

Related terms

GMROI

Gross margin earned per dollar of inventory.

markup / IMU

The difference between cost and retail price; initial markup (IMU) is set before any markdown.

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