Name: Gross Profit Margin

Definition: Gross profit margin shows how much profit the company keeps from each dollar of sales after covering the direct cost of making its products or delivering services. High margins suggest strong pricing power or efficient production. Shrinking margins might mean rising costs or tougher competition eating into profits.

Interpretation:
• In '2021', SMSI's gross profit margin was 78.3%, showing profitability after production and operational costs. Industry average for Computer Software: Prepackaged Software in '2021' stood at 63.6%.
• In '2022', SMSI's gross profit margin was 70.7%, showing profitability after production and operational costs. The decline from '2021' may indicate some operational or financial challenges. Industry average for Computer Software: Prepackaged Software in '2022' stood at 62.0%. Industry average declined by 1.7% from previous year.
• In '2023', SMSI's gross profit margin was 74.2%, showing profitability after production and operational costs. The increase since '2022' reflects strengthening financial performance. Industry average for Computer Software: Prepackaged Software in '2023' stood at 61.7%. Industry average declined by 0.3% from previous year.
• In '2024', SMSI's gross profit margin was 70.2%, showing profitability after production and operational costs. The decline from '2023' may indicate some operational or financial challenges. Industry average for Computer Software: Prepackaged Software in '2024' stood at 63.5%. Industry average increased by 1.8% compared to previous year.
Overall, SMSI's gross profit margin has consistently declined during the past 4 years.

Formula: Gross Profit Margin = (Revenue - COGS) / Revenue

Good Range: Often 20%-60% depending on industry.