Definitions for "Profit Margin" Add To Word List
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The profitability of a company measured by relating profits to revenues. The three most common profit margin calculations are: operating profit margin, pretax profit margin and net profit margin.
The ratio of profits (generally pre-tax) to sales. To calculate, divide pre-tax profit by sales/revenues.
see return on sales.
A measure of a company's efficiency, determined by dividing net income by net sales during the past 12 months.
The last fiscal year net income divided by the last fiscal year's sales or revenues for a given corporation.
The ratio of the net profit of an organization to its turnover.
Net income divided by net sales. To Top
Profit divided by sales. One of several measures that differ in the definition of profit used.... more on: Profit margin
Determined by dividing Net Income by net sales and is expressed as a percentage. Profit margin is a measure of how efficiently the business is operating.
The percentage return on sales.
A calculation for comparing the profit of different products you sell. Calculate it by dividing the profit by the amount you charge (price) for your product. For example, if your profit on cotton candy that you sell for \$1.50 each is \$1.20, your profit margin is 80% (\$1.20 ¸ \$1.50 = 0.8, or 80%). If your profit on Sno-Kones that you sell for \$1.00 each is \$0.85, your profit margin is 85% (\$1.00 ¸ \$0.85 = \$.85, or 85%).
the ratio gross profits divided by net sales
An indicator of profitability. Determined by dividing net income by revenue for a specific period. The result is usually shown as a percentage.
See Margin.
In respect of gross profit margin, it is the excess of selling price over the cost of sales.
Indicator of profitability that is calculated by dividing the net income by the revenue for the same twelve month period, and the profit margin is represented as a percentage.
The difference between the selling price and costs. A large amount of factors influences the profit margin both inside and outside the company. It is necessary to calculate a reasonable profit margin in order to stay in business.
a financial ratio obtained by dividing net profits by net sales. Used to measure the effectiveness of marketing.
A component of the rate of return on investment, computed as the ratio of controllable operating income to sales.
(Profit (Loss) x 100) / Operating Revenue An Indicator of profitability.
The proportion of each sales dollar that filters down to income, defined as income divided by net sales.
Net earnings after taxes divided by sales. Measures the ability of a firm to generate earnings from sales.
For financial reporting, the difference between revenues and expenses.
The percentage difference between the costs of a product and the price you sell it for. Eg. if a product costs you \$10 to buy and you sell it for \$20, then you have a 100% profit margin. This is also known as your 'mark-up'.
Calculated by dividing the net income by revenues. This calculation indicates what portion of sales contribute to the income of a company. This is often used when comparing companies within an industry. A high profit margin indicates a more profitable company. A smaller profit margin reflects a pricing strategy and/or the impact of competition within the industry.
Gross profit expressed as a percentage of net revenues. The net of revenues and expenses.
The ratio of earnings available to stockholders to net sales.
The margin found by dividing a firm's post-tax net earnings by sales (Profit margin measures how well a firm can earn money from sales relative to others.)
A company's earnings before interest and tax as a percentage of its turnover.
the relationship between net sales and gross profits. It indicates whether the company can cover operating expenses and yield a profit. Gross profit margins are obtained by dividing gross income by net sales.
A proportion of sales revenue which can be expressed as a total or on a per unit basis.
Gross profit margin equals sales revenue minus cost of goods sold. See also gross profit.
A measure of profitability; the percentage of each sales dollar that results in net income; net income divided by net sales.
Net profit after taxes divided by sales.
Indicator of profitability. Determined by dividing net income by revenue for the same 12-month period. Result is shown as a percentage.
Profit Margin is a percentage calculated as Net Profit after Tax divided by Revenue.
The amount by which a company's sales and other earnings exceed its expenses, expressed as a percentage.
A measure of a company's profitability, cost structure and efficiency, calculated by dividing earnings or cash flow by revenue. There are four basic types of profit margin: gross, operating, pre-tax and net. Net margin is the one investors pay the most attention to. It shows a company's profitability after all costs, expenses and taxes have been paid. The net margin is calculated by dividing earnings by revenue and then multiplying by 100. Margins are particularly helpful since they can be used both to compare profitability among many companies and to look for financial trouble at a single outfit.
Is the profit as a percentage of sales.
total revenues less total expenses
The ratio of profit to sales. Several profit margin ratios are used. The two most commonly used are gross profit margin (gross profit divided by sales) and net profit margin (net profit divided by sales).
A measurement of trading success - take pre-tax profit/loss as a percentage of sales turnover.
Indicates profitability. A percentage derived by dividing net income by net sales.