Gross Profit Margin is a financial metric that shows the percentage of revenue that exceeds the cost of goods sold (COGS). It is calculated by subtracting COGS from total revenue and then dividing that number by total revenue. This ratio helps businesses understand how efficiently they are producing and selling their products. A higher Gross Profit Margin indicates that a company retains more money from each sale, which can be used for operating expenses, investments, or profit. It is an important indicator for investors and management to assess the profitability and financial health of a business, such as retail companies or manufacturers.