The gross margin basically shows the profitability of the company’s products. Gross margin does not include operating expenses only cost of goods sold is included. Black Sea plc’s gross profit margins decreased from 49.4% to 47.4%. However in both years they were lesser than the Industry’s Gross profit margin. The decrease in gross profit margin is because although the gross profit and net sales increased, but they increased in different proportions. The net sales increased in a larger proportion than the gross profit.