gross margin contraction

USAGE SUMMARY

The phrase "gross margin contraction" is correct and usable in written English.
It can be used in financial contexts to describe a decrease in the gross margin, which is the difference between revenue and cost of goods sold. Example: "The company's recent financial report indicated a significant gross margin contraction due to rising production costs."

✓ Grammatically correct

Human-verified similar examples from authoritative sources

Similar Expressions

57 human-written examples

Gross profit margin (sometimes just called "gross margin") is different that gross profit.

WikiHow

Its adjusted gross margin stood at 26.8percentt.

The New York Times - Tech

Its gross margin rate increased 1.8 percentage points, to 29.1 percent.

The New York Times

I need to know is it gross margin?

The Guardian

They included net account receivables, net worth, net sales, gross margin, and operating profit margin.

The New York Times

No inventory, very high gross margin.

Forbes

A gross margin of 44percentt.

TechCrunch

The gross margin of 42% is rising.

Forbes

–The gross margin for the last fiscal year is greater than the gross margin for the fiscal year two years ago.

Forbes

Then, gross margin for TMS will be lowered.

Journal of Global Entrepreneurship Research

Last year, Apple reported a 47.4percentt gross margin.

TechCrunch

Expert writing Tips

Best practice

Use 'gross margin contraction' when you want to specifically highlight the shrinking nature of profitability from sales after accounting for the direct costs of goods or services.

Common error

Avoid using "gross margin contraction" when you actually mean a decline in net profit margin. Gross margin focuses solely on production costs, while net profit margin reflects all expenses, including overhead and taxes. Therefore, make sure the contraction genuinely relates to production efficiencies and costs, and not broader operational inefficiencies.

Linguistic Context

The phrase "gross margin contraction" functions as a noun phrase, typically used as a subject or object in financial reporting and analysis. It describes a decrease in the difference between revenue and cost of goods sold.

Expression frequency: Missing

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Ludwig's WRAP-UP

"Gross margin contraction" is a noun phrase used in business and finance to describe a decrease in a company's gross profit margin. As Ludwig reports, this phrase is grammatically correct and used to report a negative trend in a company's profitability. Alternative phrases include "gross margin decline" and "gross margin reduction". When discussing this term, it is important to provide specific percentages or monetary values to give context and show the extent of the impact. Avoid using this term when you actually mean net profit margin contraction. It's a negative indicator, suggesting less efficiency in profit generation from sales.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

Gross margin decline

Replaces "contraction" with the more common synonym "decline", indicating a decrease.

Gross margin reduction

Uses "reduction" instead of "contraction", suggesting a lessening of the gross margin.

Decrease in gross margin

Rephrases the term to highlight the decrease in gross margin using a prepositional phrase.

Shrinking gross margin

Employs "shrinking" to convey the diminishing nature of the gross margin.

Erosion of gross margin

Suggests a gradual wearing away or decline of the gross margin.

Compression of gross margin

Indicates a squeezing or narrowing of the gross margin.

Gross margin deterioration

Uses "deterioration" to describe a worsening of the gross margin.

Worsening gross margin

Simple and direct way to express that the gross margin is getting worse.

Gross margin squeeze

Suggests external factors are negatively impacting the gross margin.

Lowering of gross margin

Highlights the act of reducing the gross margin, potentially through strategic decisions or market forces.

FAQs

How can I use "gross margin contraction" in a sentence?

You can use "gross margin contraction" to describe a situation where a company's gross profit margin has decreased. For example, "The company experienced a significant "gross margin contraction" due to rising raw material costs".

What are some alternative phrases for "gross margin contraction"?

Alternatives include "gross margin decline", "gross margin reduction", or "decrease in gross margin". These phrases all convey a similar meaning of a decrease in profitability.

What causes a "gross margin contraction"?

A "gross margin contraction" can be caused by various factors such as increased cost of goods sold (e.g., raw materials, labor), decreased selling prices, changes in product mix, or increased competition.

Is "gross margin contraction" a negative indicator for a company?

Yes, a "gross margin contraction" is generally considered a negative indicator as it suggests that a company is becoming less efficient in generating profit from its sales. It can signal potential issues with cost control, pricing strategies, or competitive pressures.