These are reflected on the company'

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From revenue. Profit margin measures the degree to which a company or business makes money essentially by dividing income by revenue. Expressed as a percentage profit margin indicates the number of cents in profit generated per dollar sold. While there are several types of profit margin the most important and most widely used is net profit margin a company's net profit after all other expenses including taxes and one-time anomalies removed from revenue. Profit margins are used by creditors investors and companies themselves as indicators of a company's financial health management skills and


growth potential. Because typical profit margins vary by industry sector caution should be taken when comparing numbers for different businesses. Read also The best ways to make money from the Internet . Profit Margin Basics Business Lead Companies and individuals around the world engage in for-profit economic activities with the aim of making profits. However absolute numbers – such as  million in total sales in business expenses orprofits – fail to provide a clear realistic picture of a company's profitability and performance. Several different quantitative metrics are used to calculate the gains or lossesa company generates making it easy to evaluate a company's performance over different time periods or compare it to competitors. These measures are called




profit margin. While owned companies such as local stores may calculate profit margins at a desired frequency such as weekly or fortnightly) larger companies including listed companies are required to report them according to standard reporting time frames such as quarterly or annually Businesses that may operate with lent money may be required to account for it and report it to the lender eg a bankon a monthly basis as part of standard procedures. There are four levels of profit or profit margins gross profit operating profit profit before taxes and net profit.s income statement in the following sequence The company takes the sales revenue then pays the direct costs of the service product. What's left is gross margin. You then pay.