how does a company increase its gross profit margin 
there are several ways that a company can increase its gross profit margin and therefore its profitability these include the bottom lineas an investor it s smart to look at key financial metrics to make well informed decisions about the companies you add to your portfolio one important metric is the gross profit margin which you can calculate by subtracting the cost of goods sold from a company s revenue both figures are available on the income statement a higher gross profit margin indicates a more profitable and efficient company however comparing companies margins within the same industry is essential as this allows for a fair assessment due to similar operational variables 