What is Gross Profit / Gross Margin and why managers use it?

In many cases to compare 2 firms you need an intermediate step between Revenue and Operating Profit. This step we call Gross Profit or Gross Margin. I will show you today how we define it and why we use it. This movie is a part of my new on-line course Finance & Accounting for Management Consultants and Analysts: http://bit.ly/EssentialFinanceAccounting so check it to get access to all the practical tips that will help you use KPIs to understand and manage businesses, motivate people and create value Check also my other movies : 1. Essential Finance & Accounting for Management Consultants and Analysts – presentation: https://www.slideshare.net/AsenGyczew... 2. Modeling Capex and Depreciation in Excel:    • Financial modeling – how to model in Excel...   3. Modeling Working Capital in Excel:    • Financial modeling in Excel - Working capital   4. Modeling Retail business model in Excel:    • How to model in Excel Retail business - Fi...   5. How to model revenues in consumer goods:    • How to model revenues of consumer good bus...   6. How to model fixed and variable costs in consumer goods / FMCG:    • How to model  fixed and variable productio...   7. How to model gross margin in consumer goods / SMCG:    • Consumer Goods Financial Model in Excel – ...   8. Division of costs by types:    • Division of costs by types – what it is an...   9. Division of costs by stages:    • Division of costs by stages – what it is a...   10. Why EBITDA is so important:    • Financial Analysis - Why managers and Inve...