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Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed. | Profit margin, Net Margin or Net Profit Ratio all refer to a measure of profitability. It is calculated using a formula and written as a percentage or a number. Profitability is a technical analysis term used to compare performances of different trading systems or different investments within one system. ...
In mathematics, a percentage is a way of expressing a number as a fraction of 100 (per cent meaning per hundred). It is often denoted using the percent sign, %. For example, 45% (read as forty-five percent) is equal to 45 / 100, or 0. ...
The profit margin is mostly used for internal comparison. It is difficult to accurately compare the net profit ratio for different entities. Individual businesses' operating and financing arrangements vary so much that different entities are bound to have different levels of expenditure, so that comparison of one with another can have little meaning.
For example, a company produces a loaf of bread and sells it for 10 units of currency. It cost the company 6 units of currency to produce the bread and it also had to pay an additional 2 units of currency in tax. Taxes redirects here. ...
That makes the company's net income 2 units of currency (10 - 6, before tax, then minus 2 for tax). Since its revenue is 10 units of currency, the profit margin would be (2 / 10) or 20%. For the tax agency in Ireland of the same name, see Revenue Commissioners. ...
Profit margin is an indicator of a company's pricing policies and its ability to control costs. Differences in competitive strategy and product mix cause the profit margin to vary among different companies.
See also A financial ratio is a ratio of two numbers of reported levels or flows of a company. ...
In economics, operating margin is the ratio of operating income divided by sales revenue. ...
Profit is what is gained, after costs are accounted for. ...
Gross profit margin is a financial ratio used to assess the profitability of a firms core activities, excluding fixed costs. ...
This article or section needs to be wikified. ...
External links - Yahoo! Finance - Stock Screener - By profit margin
- Stock Screener - Highest Profit Margin on MSN Money
- Calculating Profit Margin with Excel - Download an Excel spreadsheet that calculates profit margin for you.
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