Is it true that gross margin represents the difference between retail price and the cost of goods sold?

Gross margin is indeed defined as the difference between the retail price of a product and its cost of goods sold (COGS). This metric is crucial for businesses, including those in golf operations, as it provides insight into how efficiently a company can produce and sell its products at a profit.

By calculating the gross margin, businesses can assess the viability of their pricing strategies, evaluate the efficiency of their operations, and make informed decisions regarding pricing and product sourcing. A higher gross margin indicates a greater gap between sales revenue and production costs, suggesting that the business retains more profit per sale.

Understanding gross margin is essential for effectively managing inventory, deciding on promotional pricing, and analyzing overall financial health. This direct relationship between retail price and COGS underscores why the statement is accurate, verifying that the computation of gross margin is a foundational aspect of financial analysis in the retail segment of the golf industry.