Profit margin is basically a ratio of the profit to the sales, it is measured per evey $1 of sales
Gross profit margin = gross profit/Sales Rev
Net profit margin = net profit/Sales Rev
E.g. A samll retail store made $150,000 sales, $100,000 gross in 2010 and $75,000 net in 2010
Gross profit margin = 100000/150000 = 0.666 = $0.67 per $1 sales
Net profit margin = 75000/150000 = 0.5 = $0.50 per $1 sales
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