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A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss, or a negative margin. Profit margin is an indicator of a company's pricing strategies and how well it controls costs. Differences in competitive strategy and product mix cause the profit margin to vary among ...
In some industries, like clothing for example, profit margins are expected to be near the 40% mark, as the goods need to be bought from suppliers at a certain rate before they are resold. In other industries such as software product development, the gross profit margin can be higher than 80% in many cases. [3]
For a business, gross income (also gross profit, sales profit, or credit sales) is the difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxation, and interest payments.
Note: A version of this article was published at TKer.co.. Stocks ticked higher last week, with the S&P 500 rising 0.4% to close at 4,327.78. The index is now up 12.7% year to date, up 21% from ...
A good operating margin is needed for a company to be able to pay for its fixed costs, such as interest on debt. A higher operating margin means that the company has less financial risk. Operating margin can be considered total revenue from product sales less all costs before adjustment for taxes, dividends to shareholders, and interest on debt.
In most forms of English, percent is usually written as two words (per cent), although percentage and percentile are written as one word. [9] In American English, percent is the most common variant [10] (but per mille is written as two words). In the early 20th century, there was a dotted abbreviation form "per cent.", as opposed to "per cent".
Within economics, margin is a concept used to describe the current level of consumption or production of a good or service. [1] Margin also encompasses various concepts within economics, denoted as marginal concepts , which are used to explain the specific change in the quantity of goods and services produced and consumed.
In business and accounting, net income (also total comprehensive income, net earnings, net profit, bottom line, sales profit, or credit sales) is an entity's income minus cost of goods sold, expenses, depreciation and amortization, interest, and taxes for an accounting period.