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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 MatchesNot for profitNot for profitAn organization established for charitable, humanitarian, or educational purposes that is exempt from some taxes and in which no one in profits or losses. Risk adjusted profitabilityRisk adjusted profitabilityA probability used to determine a "sure" expected value (sometimes called a certainty equivalent) that would be equivalent to the actual risky expected value. ProfitProfitRevenue minus cost. The amount one makes on a transaction. Gross profitGross profitThe difference between (i) turnover and (ii) the cost of making a product or providing a service, before taking into account overheads, salaries and wages, and interest payments.The logical step after calculating gross profit is to go on to calculate the gross profit margin, which is the gross profit as a percentage of turnover.Example: a company has turnover of £10m and the cost of providing its service is £5mits gross profit is £5mits gross profit margin is £5m / £10m x 100 = 50% Non profit endowmentNon profit endowmentThis type of endowment guarantees repayment of the loan. There are no annual or final bonuses and you generally have no chance of a cash surplus on maturity. Essentially, there is no benefit other than life cover which is eaqual to the value of the mortgage you have ttaken out. This is seen as an inefficient method of saving the money to pay back and is therefore rarely recommended as a method of repaying a mortgage. Further Suggestionsoperating profitTrading profit Excess profits tax profits warning Windfall profit Accumulated profits tax profit sharing scheme Profit sharing plan Profit Graph Unitised with profit endowment Full with profit endowment Book profit Profit forecast Excess profit Operating profit margin Pretax earnings or profits Net profit margin Profit taking Gross profit margin Profit maximizing net profit pre tax profit net profit before tax (pre tax profit) Realized profit (or loss) Zero profit |
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