> ## Documentation Index > Fetch the complete documentation index at: https://docs.vortexiq.ai/llms.txt > Use this file to discover all available pages before exploring further. # Gross Margin Percentage, SAP > Revenue minus COGS over revenue. The single best margin-health number for the executive view. How to read it, why it matters, and how to act on it. **Metrics type:** [Key Metrics](/nerve-centre/overview#metrics-types-explained) • **Category:** [Ecommerce Platform](/nerve-centre/connectors#connectors-by-type) > Revenue minus COGS over revenue. The single best margin-health number for the executive view. ## At a glance > Gross margin percentage = (Revenue minus COGS) / Revenue, period-window. The single best margin-health number for the executive view. Sources revenue from S/4HANA Cloud Universal Journal revenue accounts and COGS from the matching cost-of-goods-sold posting created at goods issue (movement type 601 + automatic offsetting cost posting via OBYC tables). | | | | ----------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **What it counts** | `(SUM(revenue postings) minus SUM(COGS postings)) / SUM(revenue postings)` for the period, computed inside the Universal Journal `ACDOCA` filtered to the relevant GL account hierarchy nodes. Revenue node typically 4xxxxx range, COGS node typically 5xxxxx range. Each Billing Document creates both a revenue line (credit) and a COGS line (debit) at posting; the card uses both sides per period. | | **Tax treatment** | Net of tax on both sides. | | **Shipping** | Revenue side includes freight if pricing-procedure freight conditions map to revenue. COGS side typically includes inbound freight loaded onto material standard or moving-average price; outbound freight is operating expense, not COGS. | | **Discounts** | Revenue side is net of discounts. COGS side is net of procurement discounts loaded onto valuation. | | **Refunds** | Both sides netted. | | **Cancelled / voided orders** | Excluded. | | **Currency** | Group Currency for consolidated views; Company Code currency for single-CC views. | | **Company Code scope** | Respects dashboard filter. | | **COGS basis** | Standard (S) or moving-average (V) per material. SAP Material Ledger / Actual Costing tenants: actual cost where available. | | **Time window** | `30D vsP` | | **Alert trigger** | `drop >2pp vsP`, sentiment `margin` | | **Roles** | owner, finance | ## Calculation Calculated automatically from your SAP data. See the At a glance summary above for what the metric tracks and the worked example below for a typical reading. ## Worked example A US enterprise B2B distributor on S/4HANA Cloud. 30-day window 04 Apr 26 to 03 May 26. | Component | Value (USD, Group Currency) | | --------------------------------------- | --------------------------- | | Revenue (booked into GL) | \$20,140,000 | | COGS (matching goods-issue postings) | \$14,820,000 | | Gross margin | \$5,320,000 | | **Gross Margin Percentage (this card)** | **26.4%** | | | This period | Prior 30D | vsP | | ---- | ----------- | --------- | ------ | | GM % | 26.4% | 28.7% | -2.3pp | Five things to notice: 1. **GM% at 26.4% is below the 28.7% prior period, a 2.3pp drop.** Card fires the `drop >2pp vsP` alert. 2. **What drives a 2.3pp drop?** Three usual causes (in order of frequency): (a) standard-price changes on key materials with cost increases not yet passed through to selling price, (b) mix shift toward lower-margin products, (c) increased discounting / promotional activity. 3. **Drill into [Margin Erosion Alerts](/nerve-centre/kpi-cards/sap/margin-erosion-alerts)** for the per-SKU breakdown. Typically a handful of materials drive most of the change. 4. **Drill into [Margin by SKU](/nerve-centre/kpi-cards/sap/margin-by-sku)** for the full table sorted by margin contribution. The top 50 SKUs typically explain 70 to 80% of total gross profit. 5. **Multi-Company-Code GM% comparison.** US 28.1%, CA 24.6%, MX 21.8%. The MX margin is structurally lower (smaller deals, more competitive market), but if MX dropped 4pp this period that is a localised problem worth investigating separately. ## Sibling cards merchants should reference together | Card | Why pair it with Gross Margin Percentage | | ------------------------------------------------------------------------------------------------ | ----------------------------------------------------------- | | [Margin Erosion Alerts](/nerve-centre/kpi-cards/sap/margin-erosion-alerts) | Per-SKU drilldown of which materials drove the margin drop. | | [Margin by SKU](/nerve-centre/kpi-cards/sap/margin-by-sku) | Full margin-by-SKU table. | | [Total COGS](/nerve-centre/kpi-cards/sap/sap-cogs-total) | The denominator-adjacent figure. | | [Average Landed Cost per Unit](/nerve-centre/kpi-cards/sap/average-landed-cost-per-unit) | Cost trend that erodes margin from below. | | [Landed Cost Variance vs Standard](/nerve-centre/kpi-cards/sap/landed-cost-variance-vs-standard) | When actual cost exceeds standard, margin compresses. | | [Revenue Booked into GL](/nerve-centre/kpi-cards/sap/revenue-booked-into-gl) | The revenue side of the calculation. | | [Margin Compression](/nerve-centre/kpi-cards/sap/margin-compression) | The alert variant of this card for trend-watch. | ## Reconciling against the vendor's own dashboard **Where to look in S/4HANA Cloud:** > **Income Statement** Fiori app (`F0708`) showing Revenue and COGS lines > **Margin Analysis** Fiori app, profitability segment view (CO-PA / Margin Analysis) > **SAP Analytics Cloud** Profitability story > **Embedded Analytics**: CDS view `I_OperatingProfit` Direct deep-link: `https://my{tenant}.s4hana.cloud.sap/sap/bc/ui2/flp#MarginAnalysis-display` **Why our number may legitimately differ from SAP's Income Statement / Margin Analysis:** | Reason | Direction | Why | | ------------------------------------ | --------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **COGS account scope** | Either | SAP's chart varies; the card uses the COGS hierarchy node (typically 5xxxxx). If your chart maps freight or warehousing to COGS, the card includes it. | | **Material Ledger / Actual Costing** | Small | If your tenant uses Actual Costing, period-end revaluation can adjust historical COGS retroactively. The card uses each material's price-control source live; differences settle at month-end revaluation. | | **CO-PA Margin Analysis** | Either | SAP's CO-PA view of margin can include cost components (labour, overhead) that this card excludes. The card is gross margin (revenue - direct COGS only); CO-PA can show contribution margin or net operating profit. | | **FX rate type** | Small | Card uses TCURR rate type M; SAP reports may use different rate types per period. | **Cross-connector reconciliation:** This is the SAP-side answer; commerce platforms cannot show true gross margin because they do not own COGS. Commerce-platform "margin" is typically calculated on a manually-entered cost-per-product field, which is rarely current. ## Known limitations / merchant FAQs **What is a healthy gross margin for B2B distribution?** 22 to 32% typical. Specialty distribution: 35 to 45%. Commodity distribution: 10 to 18%. Industry context matters more than absolute number. **Why does GM% drop when revenue grows?** Either mix shift (more low-margin volume) or cost increases not reflected in selling price. Pair this with [Margin by SKU](/nerve-centre/kpi-cards/sap/margin-by-sku) to diagnose. **Standard cost vs moving average, which is more accurate?** Standard cost is more stable (good for budgeting); moving average reflects current procurement reality. SAP allows mixing per material. The card uses each material's setting; the executive view may smooth over genuine cost variance if standard prices are stale. **Material Ledger / Actual Costing impact?** Period-end revaluation in Material Ledger can shift historical COGS retroactively. The card picks up the latest revaluation snapshot; expect small jumps at month-end close. **FX swings affect margin?** Yes if revenue and COGS are in different currencies. A USD-revenue / EUR-COGS line will see margin shift with EUR/USD movement. SAP's parallel-currency posting captures this; the card uses Group Currency for consistency. **SAP Analytics Cloud Profitability story shows different margin, why?** SAC may use CO-PA Margin Analysis (which includes contribution-cost components beyond COGS) or different period definitions. Re-run SAC at the same revenue and COGS account scope and the figures reconcile. **Refunds and Credit Memos, how do they hit margin?** Both sides. A Credit Memo (G2) reverses revenue; the corresponding goods receipt (return delivery, movement type 651/653) reverses COGS. Net margin impact reflects both legs. **Mix-shift vs price-cost gap, how do I tell them apart?** Drill into [Margin by SKU](/nerve-centre/kpi-cards/sap/margin-by-sku). If most SKUs maintained their unit margin and the headline dropped, it is mix shift. If most SKUs lost unit margin, it is a price-cost gap (cost-up or price-down). **T-codes for drilling in?** S\_ALR\_87012284 (Income Statement), KE30 (CO-PA execution), MR21 (price change), CKM3N (price analysis). *** ### Tracked live in Vortex IQ Nerve Centre *Gross Margin Percentage* is one of hundreds of KPI pulses Vortex IQ tracks across SAP and 70+ other ecommerce connectors. Nerve Centre runs the detection layer; Vortex Mind investigates the cause when something moves; Ask Viq lets you interrogate any number in plain English. 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