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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 MatchesProfit 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. Accumulated profits taxAccumulated profits taxA 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 profitOperating profitA company's profit after deducting its operating costs from gross profit. Profit takingProfit takingAction 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 marginGross profit marginGross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. Further SuggestionsGross profitprofit 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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