Profit margin

 

Home
Site Map
Add Term
Search
About Us
Contributors

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

Directly Unproductive Profit-Seeking Activities

Directly Unproductive Profit-Seeking Activities

Activities that have no direct productive purpose (neither increasing consumer utility nor contributing to production of a good or service that would increase utility) and are motivated by the desire to make profit, typically from market distortions created by government policies. Examples are rent seeking and revenue seeking. Term coined by Bhagwati (1982).


Unitised with profit endowment

Unitised with profit endowment

This is a hybrid unit-linked endowment, designed to smooth out price fluctuations that occur with unit-linked policies. The value of units is declared each year and that value is then guaranteed. The guaranteed value that is declared is at a discount to the actual value of the units. The guaranteed value will not reach the real value until the term of the endowment is up, so the chance of being able to pay of the loan early is minimised.


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.


Not for profit

Not for profit

An organization established for charitable, humanitarian, or educational purposes that is exempt from some taxes and in which no one in profits or losses.


Accumulated profits tax

Accumulated profits tax

A tax on earnings kept in a firm to prevent the higher personal income tax rate that would obtain if profits were paid out as dividends to the owners.


Further Suggestions

profit sharing scheme
Profit shifting
Realized profit (or loss)
Windfall profit
Profit Table
operating profit
Gross profit margin
profits warning
Profit Graph
Pretax earnings or profits
Risk adjusted profitability
unitised with profits
Operating profit margin
Profit maximizing
Non profit endowment
Net profit margin
Profit
Zero profit
profit and loss statement (P&L)
gross profit
Excess profit
Full with profit endowment
Gross profit
Profit Range
net profit before tax (pre tax profit)


 
All rights Reserved. Do not copy without permission.