Search results
Results from the 24/7 Vacations Content Network
Net profit margin is net profit divided by revenue. Net profit is calculated as revenue minus all expenses from total sales. Example. A company has $1,000,000 in revenue, $600,000 in COGS, $200,000 in operating expenses, and $50,000 in taxes. Net profit is $150,000, and net profit margin is (150,000 / 1,000,000) x 100 = 15%.
Net income can also be calculated by adding a company's operating income to non-operating income and then subtracting off taxes. [5] The net profit margin percentage is a related ratio. This figure is calculated by dividing net profit by revenue or turnover, and it represents profitability, as a percentage.
Net interest margin. Net interest margin ( NIM) is a measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders (for example, deposits), relative to the amount of their (interest-earning) assets. It is similar to the gross margin (or gross profit ...
Operating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS) [9] [10] Operating Income / Net Sales Note: Operating income is the difference between operating revenues and operating expenses, but it is also sometimes used as a synonym for EBIT and operating profit. [ 11 ]
Operating margin. In business, operating margin —also known as operating income margin, operating profit margin, EBIT margin and return on sales ( ROS )—is the ratio of operating income ("operating profit" in the UK) to net sales, usually expressed in percent. Net profit measures the profitability of ventures after accounting for all costs.
Gross margin is often used interchangeably with gross profit, but the terms are different. When speaking about a monetary amount, it is technically correct to use the term gross profit; when referring to a percentage or ratio, it is correct to use gross margin. In other words, gross margin is a percentage value, while gross profit is a monetary ...
Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the variable cost per unit. "Contribution" represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs. This concept is one of the key building blocks of break-even analysis.
Investopedia defines "gross margin" as: Gross margin (%) = (Revenue − Cost of goods sold) / Revenue [2] In contrast, "gross profit" is defined as: Gross profit = Net sales − Cost of goods sold + Annual sales return. or as the ratio of gross profit to revenue, usually as a percentage: Cost of sales, also denominated "cost of goods sold ...