1️⃣ Gross Profit margin 

The gross margin tells what is the difference in percentage terms between how much a firm sells its goods/services for and how much it costs to the firm to produce and deliver them to its customers.

The value of this ratio indicates the percentage of income generated by the company's sales. The higher is the gross margin, the greater would be the profit from each dollar or revenue earned from sales.

🧠 Gross Profit ➗ Net Sales 

🎯 Gross profit = Revenue - cost of sales  

🎯 Net sales = Revenue

To explain the impact on gross margin in percentage points is possible to create company's gross margin snapshot:

➕ Revenue    

➖ Cost of Sales

🟰  Gross profit

➗ Revenue

🟰  Gross margin %

This indicator reveals in percentage terms the profitability of sales in term of operating return as a first line of self-financing and growth capacity of the firm. 

It is slightly different from the Return On Sales (ROS) because it doesn't count non monetary costs running in the business activity of the company (typically accounted as Depreciation and Amortization), so that can give a deep insight in the company's profitability of sales in term of liquidity.  

2️⃣Operating margin

This operating profit margin explains in percentage terms the portion of revnues (net sales) that is left over after taking account of all operating costs and any other income. It is a key margin from a profitability perspective. Hence it is a key performance indicator among the others. 

Formula

🧠 Profit Before Interest & Taxes ➗ Net Sales

Interpretation: the operating margin reflects the efforts a management of a company to maximise the gross margin whilist controlling the running operating costs of the firm. It is important to evidence that these two goals can conflicts. A reduction in marketing costs will lowering other expenses but, on the other hands, over time, is likely to result in a lower prices and lower revenues. Analysts decompose this operating margine indicator into its constituent parts to help identify what was responsible for changes in its value.

To explain the impact on margin in percentage points is possible to create this report:

➕ gross margin in %   

➕ overheads rate in %

➕ other income/revenue in %

🟰  operating margin

3️⃣Net Profit Margin 

It is a profitability ratio of the company's sales. The value of this ratio is given by dividing two factors of the income statements of the company's accounts.

🧠 Net Profit ➗ Net Sales

By comparing this ratio with the Return On Investment the company's management can be supported in a deep analysis whether to improve margin and therefore efficiency in the operating management of the company or to carry out other strategic decisions. 

This indicator values the profitability of sales (turnover) in percentage terms and within an expanded analysis provides important economic information on the overall management of the company by the company management. In fact, the value is given by the ratio between the net operating result and the turnover whose result expressed in percentage terms indicates the portion of profit that is generated by sales, indirectly expressing the efficiency of the current management of the company in the make profits.