What Are the Different Ways of Calculating Profit Margin?
A company’s profit margin is a company’s earnings for a specific time period, usually expressed in the form of a percentage. Calculating profit margin helps business owners and managers to understand how much money their company generates from operations. Different formulas exist for calculating profit margin. This allows companies to approach this information from a few different points of view to gain a full understanding of their operations. Profit margins formulas also provide owners and managers with a benchmark to compare against the industry average, helping them assess their company’s performance under current economic conditions.
