Financial Term Of The Day-”Profit Margin”

Posted on May 24, 2008
Filed Under Series - Financial Term Of The Day! |

 Profit Margin: A ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings.

Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors.

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