Browse Definitions :
Definition

profit margin

A profit margin is the difference between what it costs a business to get a product or service to market and the price it charges for it. Profit margins are also calculated for companies to quantify the difference between multiple profit / loss elements on an income statement.

The profit margin is a profitability ratio. To calculate the net profit margin for a company, you divide the figure for net income by the figure for revenue (also known as gross income).  Other types of profit margins in a business include the gross profit margin (gross profit divided by revenue), operating margin (operating profit divided by net sales) and pretax profit margin (pretax earnings divided by total sales). Similarly, the profit margin for a product or service can be calculated by dividing the unit cost of production by the unit sales price.

Profit margin is usually expressed as a percentage, which converts directly to a dollar value quantifying how much of each dollar of sales or revenue is actually profit. A profit margin of 25 percent, for example, means that 25 cents of each dollar taken in is profit.

This was last updated in August 2018

Continue Reading About profit margin

SearchCompliance
  • risk reporting

    Risk reporting is a method of identifying risks tied to or potentially impacting an organization's business processes.

  • risk avoidance

    Risk avoidance is the elimination of hazards, activities and exposures that can negatively affect an organization and its assets.

  • risk profile

    A risk profile is a quantitative analysis of the types of threats an organization, asset, project or individual faces.

SearchSecurity
SearchHealthIT
SearchDisasterRecovery
  • What is risk mitigation?

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business.

  • fault-tolerant

    Fault-tolerant technology is a capability of a computer system, electronic system or network to deliver uninterrupted service, ...

  • synchronous replication

    Synchronous replication is the process of copying data over a storage area network, local area network or wide area network so ...

SearchStorage
  • cloud archive

    A cloud archive is storage as a service for long-term data retention.

  • cache

    A cache -- pronounced CASH -- is hardware or software that is used to store something, usually data, temporarily in a computing ...

  • archive

    An archive is a collection of data moved to a repository for long-term retention, to keep separate for compliance reasons or for ...

Close