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

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.


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.


Operating profit

Operating profit

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


Profit taking

Profit taking

Action by short-term securities traders to cash in on gains created by a sharp market rise, which pushes prices down temporarily but implies an upward market trend. See: Ring the [cash] register.


Gross profit margin

Gross profit margin

Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold.


Further Suggestions

Gross profit
profit and loss statement (P&L)
Operating profit margin
profit taking
Profit Graph
Net profit margin
Profitability index
profits warning
unitised with profits
Trading profit
Windfall profit
Unitised with profit endowment
Full with profit endowment
net profit
Excess profit
Profit forecast
profit sharing scheme
Book profit
Zero profit
pre tax profit
paper profit
Directly Unproductive Profit-Seeking Activities
Not for profit
Profit
Profit shifting


 
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