profit margin


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Related to profit margin: Net profit margin, Operating profit 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 ?
Net profit margin is equal to how much net profit is generated as a percentage of revenue.
Lenders' net profit margin outlook has stayed negative for the tenth consecutive quarter, but has improved significantly from the survey low in the prior quarter (Q4 2018) and one year ago.
In other words, those goods that have previously been subject to VAT before the supply in question may be subject to the profit margin scheme, FTA said in a statement.
The FTA representatives provided a detailed explanation of the procedures and tax legislation related to the sale of new and used vehicles, including a detailed discussion of the Profit Margin Scheme, the conditions to apply it, the goods that qualify to be supplied under it, and the relevant obligations for the Taxable Person.
Dubai: Federal Tax Authority on Tuesday clarified that value added tax (VAT) calculation on used cars based on profit margins will be applicable only to vehicles bought after the implementation of VAT.
Mustansir said the lending rate on fresh loan disbursement, made during the single month of July, remained lower at 7.72% compared to the rate on outstanding loan at 8.08% in the month, as banks compromised on their profit margins on fresh loans due to shrinking demand for credit in the economy.
The announcement was made in a public clarification about eligible goods under the profit margin scheme, as per Federal Decree-Law No.
In addition to opportunities to manage gross profit margin afforded by the integral method of reporting, there also are incentives because of the pressure to meet or beat analysts' forecasts of quarterly earnings.
Lenders' net profit margin outlook has been negative for five consecutive quarters (since Q4 2016).
The gross profit margin for mixed-use & high-rise segment in 1H17 and 1H16 were 29.8% and 38.2% respectively.
For Apple's third quarter, management guided for a gross profit margin between 37.5% and 38.5%.