"Profit margin" Definition
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 Glossary   >   P   >   "Profit margin" Definition   

        Profit margin

Indicator of profitability.

Operating profit as a percentage of sales (or turnover). To calculate profit margin, multiply operating profit by 100, and divide the result by turnover.Example: Company X made an operating profit of 500m on a turnover of 3,000m. Profit margin was therefore (500 x 100) / 3000= 16.66%Profit margin tells you about the underlying profitability of a company"s trading activities, not whether it is actually making money for shareholders. Note that it is calculated before taking account of interest charges or tax.

Profit margin


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Profit margin - Indicator of profitability.

Operating profit as a percentage of sales (or turnover). To calculate profit margin, multiply operating profit by 100, and divide the result by turnover.Example: Company X made an operating profit of 500m on a turnover of 3,000m. Profit margin was therefore (500 x 100) / 3000= 16.66%Profit margin tells you about the underlying profitability of a company"s trading activities, not whether it is actually making money for shareholders. Note that it is calculated before taking account of interest charges or tax.


Profit margin : indicator of profitability.

operating profit as a percentage of sales (or turnover). to calculate profit margin, multiply operating profit by 100, and divide the result by turnover.example: company x made an operating profit of 500m on a turnover of 3,000m. profit margin was therefore (500 x 100) / 3000= 16.66%profit margin tells you about the underlying profitability of a company"s trading activities, not whether it is actually making money for shareholders. note that it is calculated before taking account of interest charges or tax.