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Margin of Profit

   Also found in: Dictionary/thesaurus, Wikipedia, Hutchinson 0.03 sec.
Margin of profit
Gross profit divided by net sales. Used to measure a firm's operating efficiency and pricing policies in order to determine how competitive the firm is within the industry.

margin of profit

Margin of Profit
A measure of how well a company controls its costs. It is calculated by dividing a company's profit by its revenues and expressing the result as a percentage. The higher the margin is, the better the company is thought to control costs. Investors use the margin to compare companies in the same industry and well as in different industries to determine what are the most profitable. It is also called the profit margin or simply the margin.


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