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Profit margin |
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Profit marginThe difference between what it costs to produce a product or service and the selling price.Profit marginOperating 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 marginIndicator 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 MatchesPre tax profitPre tax profitSee: 'profit before tax'. Excess profitExcess profitProfit of a firm over and above what provides its owners with a normal (market equilibrium) return to capital. Paper profitPaper profitA profit which would become real if the shares held were sold at their current price. Operating profit marginOperating profit marginThe ratio of operating profit to net sales. Profitability ratiosProfitability ratiosRatios 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. Further SuggestionsExcess profits taxProfit forecast Net profit margin operating profit Full with profit endowment Zero profit Profit maximizing unitised with profits Trading profit profits warning Profitability index Not for profit Gross profit Pretax earnings or profits net profit before tax (pre tax profit) Realized profit (or loss) Accumulated profits tax Profit Non profit endowment Profit center Windfall profit net profit gross profit Directly Unproductive Profit-Seeking Activities profit before tax |
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