What is gross margin, and how do you measure it in Metabase?
Definition
Gross margin is the share of revenue remaining after direct costs required to deliver the product or service. The hard part is not the arithmetic; it is agreeing which accounts and operational costs belong in revenue and cost of revenue.
Formula: Gross margin % = (revenue - cost of revenue) / revenue x 100
What data do you need?
- Posted revenue journal lines
- Posted cost-of-revenue journal lines
- Maintained account classification
- Product, segment, customer, and period dimensions
- Credits, refunds, discounts, and revenue-recognition rules
SQL pattern
Monthly gross marginPostgreSQL
SELECT
fiscal_month,
SUM(CASE WHEN reporting_group = 'Revenue' THEN amount ELSE 0 END) AS revenue,
SUM(CASE WHEN reporting_group = 'Cost of revenue' THEN amount ELSE 0 END) AS cost_of_revenue,
ROUND(100.0 * (
SUM(CASE WHEN reporting_group = 'Revenue' THEN amount ELSE 0 END)
- SUM(CASE WHEN reporting_group = 'Cost of revenue' THEN amount ELSE 0 END)
) / NULLIF(SUM(CASE WHEN reporting_group = 'Revenue' THEN amount ELSE 0 END), 0), 2) AS gross_margin_pct
FROM modeled_gl
WHERE is_posted = TRUE
GROUP BY 1
ORDER BY 1;Common pitfalls
Using payment volume as GAAP revenue.→ Use the approved revenue-recognition or ledger source for financial gross margin.
Changing cost classification without restating history.→ Version the account mapping and document whether historical periods were restated.
Averaging segment margin percentages.→ Sum revenue and cost first, then calculate the aggregate margin.
Where does this metric apply?
This metric commonly uses data from NetSuite, Xero, QuickBooks, SAP, plus any reconciled warehouse or ledger models that provide the same business grain.
Related
Dashboards
Integrations
Metrics
Analytics
FAQ
Is gross margin the same as contribution margin?
No. Contribution margin often subtracts additional variable costs; define both account mappings separately.
Should payment fees be in cost of revenue?
That is an accounting-policy decision. Apply the approved policy consistently and disclose it in the metric definition.