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

Excess profit

Excess profit

Profit of a firm over and above what provides its owners with a normal (market equilibrium) return to capital.


Zero profit

Zero profit

A situation in which profit in an industry is zero, usually as a result of free entry and exit. It may, if firms are not identical, refer only to the marginal firm. And it always means zero excess profit, not that all returns to capital invested in the industry are zero.


Profit Table

Profit Table

A table of results of a particular strategy at some point in time. This is usually a tabular compilation of the data drawn on a profit graph. See also Profit Graph.


Net profit margin

Net profit margin

Net income divided by sales; the amount of each sales dollar left over after all expenses have been paid.


Non profit endowment

Non profit endowment

This type of endowment guarantees repayment of the loan. There are no annual or final bonuses and you generally have no chance of a cash surplus on maturity. Essentially, there is no benefit other than life cover which is eaqual to the value of the mortgage you have ttaken out. This is seen as an inefficient method of saving the money to pay back and is therefore rarely recommended as a method of repaying a mortgage.


Further Suggestions

profit before tax
Accumulated profits tax
Directly Unproductive Profit-Seeking Activities
Profit taking
Risk adjusted profitability
Profit Graph
Profit forecast
Operating profit margin
unitised with profits
Profit Range
Book profit
paper profit
Profitability ratios
profit and loss statement (P&L)
net profit before tax (pre tax profit)
Full with profit endowment
Not for profit
Profit maximizing
Gross profit margin
net profit
Profit center
Profit
profit taking
Realized profit (or loss)
profits warning


 
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