Profit margin

 

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Profit margin

The difference between what it costs to produce a product or service and the selling price.

Profit margin

Operating profit as a percentage of sales (or turnover). To calculate profit margin, multiply operating profit by 100, and divide the result by turnover.Example: Company X made an operating profit of £500m on a turnover of £3,000m. Profit margin was therefore (500 x 100) / 3000= 16.66%Profit margin tells you about the underlying profitability of a company's trading activities, not whether it is actually making money for shareholders. Note that it is calculated before taking account of interest charges or tax.

Profit margin

Indicator of profitability. The ratio of earnings available to stockholders to net sales. Determined by dividing net income by revenue for the same 12-month period. Result is shown as a percentage. Also known as net profit margin.



Profit margin

Similar Matches

Net profit after tax

Net profit after tax

The net profits of a company after taxation. This is the 'bottom line' that you often hear about. Dividends are paid out of net profits after tax, and the amount that isn't paid out is the retained profit.


Profit sharing scheme

Profit sharing scheme

A scheme where part of a company's profits are paid to employees as a reward for loyalty and contribution to the company's success. The reward may be given via cash, shares or a combination of both.


Profitability ratios

Profitability ratios

Ratios that focus on how well a firm is performing. Profit margins measure performance with relation to sales. Rate of return ratios measure performance relative to some measure of size of the investment.


Trading profit

Trading profit

The profit earned on short-term trades of securities held for less than one year, subject to tax at normal income tax rates.


Operating profit

Operating profit

A company's profit after deducting its operating costs from gross profit.


Further Suggestions

Non profit endowment
Gross profit
profit taking
Realized profit (or loss)
unitised with profits
gross profit
Directly Unproductive Profit-Seeking Activities
Excess profit
Pretax earnings or profits
Excess profits tax
Net profit margin
profit before tax
Book profit
Profitability index
pre tax profit
Profit sharing plan
paper profit
Profit Table
Profit forecast
profit and loss statement (P&L)
Risk adjusted profitability
Profit Range
Full with profit endowment
net profit
Unitised with profit endowment


 
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