Gross Margin 5 Year Average
Returns the five-year average gross margin for a company. Gross margin measures what percentage of revenue remains after deducting the cost of goods sold.
Supported Symbol Formats
| Type | Format | Example |
|---|---|---|
| US Stocks | SYMBOL | AAPL, MSFT |
Formula
Gross Margin = (Revenue - Cost of Goods Sold) / Revenue
Industry Benchmarks
| Industry | Typical Gross Margin |
|---|---|
| Software | 60-80% |
| Pharmaceuticals | 60-70% |
| Consumer Goods | 30-50% |
| Retail | 20-30% |
| Grocery | 10-15% |
Notes
- Returns value as a decimal (0.40 = 40%)
- Higher margins indicate pricing power
- Compare within same industry
Examples
=GrossMarginFiveYearAverage("AAPL")=GrossMarginFiveYearAverage("MSFT")=GrossMarginFiveYearAverage("WMT")Symbol from cell reference
=GrossMarginFiveYearAverage("AAPL")*100When to Use
- Assess product profitability
- Compare pricing power across companies
- Analyze business model efficiency
- Track margin trends over time
When NOT to Use
| Scenario | Use Instead |
|---|---|
| EBITDA margin | EBITDAMarginFiveYearAverage() |
| Net profit margin | NetMarginFiveYearAverage() |
| One-year margin growth | GrossProfitMarginOneYearGrowth() |
| Current gross margin | Current margin functions |
Common Issues & FAQ
Q: Why is the value less than 1? A: Gross margin is returned as a decimal. Multiply by 100 to get percentage (e.g., 0.40 = 40%).
Q: Why are software companies' margins so high? A: Software has minimal cost of goods sold (mostly just server costs), resulting in high gross margins. Hardware or retail companies have significant COGS.
Q: What's the difference between gross margin and gross profit? A: Gross margin is a percentage (relative), while gross profit is a dollar amount (absolute). Margin allows comparison across company sizes.
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