Discover new knowledge and insights with IDNLearn.com's extensive Q&A database. Our Q&A platform is designed to provide quick and accurate answers to any questions you may have.
Companies use gross margin to measure how their production costs relate to their revenues. For example, if a company's gross margin is falling, it may strive to slash labor costs or source cheaper suppliers of materials. Alternatively, it may decide to increase prices, as a revenue increasing measure.
Managing gross margin helps a firm avoid problems with prices that are too low and direct costs that are too high, and hence problems with breakeven and profit. When a firm is generating adequate sales but gross margins are low, it signals an issue in one or both of these areas.
Thank you for participating in our discussion. We value every contribution. Keep sharing knowledge and helping others find the answers they need. Let's create a dynamic and informative learning environment together. IDNLearn.com provides the answers you need. Thank you for visiting, and see you next time for more valuable insights.
