Gross profit margin is calculated on?

gross proft / revenue 

sales and cost of goods sold

1 sales 

Also cost of sales 

Gross profit margin is calculated on or based on sales and cost of goods sold.

Based on Cost of Sales

1- Based on Sales

Gross profit = (Sales value - (Direct Materials+Direct Labour+Direct Overheads)

Gross profit margin = Gross Profit / Sales value x100 is expressed as a %age.

There is an interpretation on what is Sales value. On a conservative note, Sales value must be (Gross sales - sales returns - discounts and rebates - freight on delivery).

It is based on sales and cost of goods sold

1- Based on Sales

It is based on sales.

sales

Sales or revenue after adjusting the direct expenses like cost of goods sold