As part of understanding profitability, I recommend focusing on gross profit and not cost of revenue. Here's a couple examples: Company A sells has total reve

As part of understanding profitability, I recommend focusing on gross profit and not cost of revenue. Here's a couple examples: Company A sells has total revenue of 1.01 million units, has a cost of revenue of 1.00 million units (1% margin), and a gross profit of 0.01 million units. Company B sells has total revenue of 1010 million units, has a cost of revenue of 1000 million units (1% margin), and a gross profit of 10 million units. A & B both have the same margins, but B had a gross profit 1000x more than A.