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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 MatchesPaper profitPaper profitA profit which would become real if the shares held were sold at their current price. Profit sharing schemeProfit sharing schemeA 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. Profit TableProfit TableA 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. Operating profitOperating profitA company's profit after deducting its operating costs from gross profit. Profit GraphProfit GraphA graphical representation of the potential outcomes of a strategy. Dollars of profit or loss are graphed on the vertical axis, and various stock prices are graphed on the horizontal axis. Results may be depicted at any point in time, although the graph usually depicts the results at expiration of the options involved in the strategy. Further Suggestionsnet profitPretax earnings or profits Risk adjusted profitability Realized profit (or loss) Profit taking Profitability ratios pre tax profit Net profit margin net profit after tax Profit maximizing Profit Range Zero profit Operating profit margin Profitability index Profit Trading profit Excess profit Non profit endowment Book profit Profit shifting Excess profits tax profit taking Full with profit endowment gross profit Unitised with profit endowment |
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