profit margin

(redirected from Operating margin)
Also found in: Dictionary, Thesaurus, Acronyms, Wikipedia.
Related to Operating margin: profit margin, Operating income, Net operating margin

Profit margin

Indicator of profitability. The ratio of earnings available to stockholders to net sales. Determined by dividing net income by revenue for the same 12-month period. Result is shown as a percentage. Also known as net profit margin.

Profit Margin

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 profit margin is, the better the company is thought to control costs. Investors use the profit margin to compare companies in the same industry and well as between industries to determine which are the most profitable.

profit margin

1. The relationship of gross profits to net sales in a business. Net sales are determined by subtracting returns and allowances from gross sales, whereupon the cost of goods sold is then subtracted from net sales to obtain gross profit. Gross profit is divided by net sales to obtain the profit margin—an excellent indicator of a firm's operating efficiency, its pricing policies, and its ability to remain competitive. See also gross profit margin.
2. Net profit margin of a business, which is calculated by deducting operating expenses and cost of goods sold and dividing the result by net sales. This term is less often used to indicate net profit margin.

Profit margin.

A company's profit margin is derived by dividing its net earnings, after taxes, by its gross earnings minus certain expenses. Profit margin is a way of measuring how well a company is doing, regardless of size.

For example, a $50 million company with net earnings of $10 million and a $5 billion company with net earnings of $1 billion both have profit margins of 20%.

Profit margins can vary greatly from one industry to another, so it can be difficult to make valid comparisons among companies unless they are in the same sector of the economy.

profit margin

the difference between the SELLING PRICE of a product and its PRODUCTION COST and SELLING COST. The size of the profit margin will depend upon the percentage profit mark-up which a firm adds to costs in determining its selling price. The size of the profit margin is measured by the PROFIT-MARGINS RATIO.

profit margin

the difference between the SELLING PRICE of a product and its PRODUCTION COST and SELLING COST. The size of the profit margin will depend upon the percentage profit mark-up that a firm adds to costs in determining its selling price, which in turn may be varied in response to changes in demand conditions and competition. See FULL-COST PRICING.

profit margin

The difference between the cost of a unit (house,subdivision parcel,condominium) including a pro rata share of all overhead and other such expenses, as compared to the sales price for that unit.

References in periodicals archive ?
The operating margin before administrative expenses was USD17.5 million (2018: USD19.9 million) and the operating margin as a percentage of revenues was 62% (2018: 60%).
"We are committed to delivering sustainable mid to high single digit revenue growth and mid 20s adjusted operating margins over time, and are pleased to report good progress in H1 despite sales, as expected, reducing year-on-year," Hostetler added.
Segment operating margin was 5.5% for the quarter, compared to 7.7% in the same period last year.
Sales rose 1% to 398,240 vehicles, but operating margin fell to 8.9% from 10.8% a year ago.
Its 2018 medians show that operating margins have declined across the board for the entire rating spectrum of hospitals.
Electronic Systems Second Quarter Ended June 30, June 24, ($ in millions) 2017 2016 Increase Net sales $ 768 $ 662 16 % Operating income $ 105 $ 83 27 % Operating margin 13.7 % 12.5 % 120 bpts First Half Ended June 30, June 24, Increase/ ($ in millions) 2017 2016 (decrease) Net sales $ 1,505 $ 1,255 20 % Operating income $ 196 $ 168 17 % Operating margin 13.0 % 13.4 % (40) bpts Second Quarter: Electronic Systems net sales for the 2017 second quarter increased by $106 million, or 16%, compared to the 2016 second quarter.
For the March 2018 quarter, non-GAAP gross margin was $1,353 million or 46.8% of revenue, non-GAAP operating expenses were $486 million, non-GAAP operating margin was 30.0% of revenue, and non-GAAP net income was $852 million, or $4.79 per diluted share.
Core operating margin reached 26.4% of net sales, up 3.4 points compared to 2016.
The company said it expected to embark on a sales growth drive later this year for NSN while maintaining its operating margin at the higher end of its targeted long-term range of five to 10 per cent and despite expectations for the margin in the first quarter of 2014 to fall to around five per cent due to seasonal factors.
Technip said it expected a subsea operating margin of at least 12 per cent in 2014, down from around 14 per cent in 2013, before picking up in 2015.
! Washington, Safar 15, 1435, Dec 18, 2013, SPA -- Ford Motor Company said Wednesday it expects lower profit in 2014 and that its target for global operating margin is at risk, due to economic conditions in Europe and South America.
We had already reported its outstanding sales growth for 2012 of [euro]4.8m (see FIN Vol 27, No 1) from [euro]43.1m to [euro]48.9m (+13%), and now we can see that this generated an operating profit before interest and taxation (EBIT) of [euro]10.8m, an increase of [euro]2.7m (+34%), and an operating margin increase of 3.4% from 18.7% to 22.1%.