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Financial Terms | |
gross margin, or gross profit |
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Definition of gross margin, or gross profitgross margin, or gross profitThis first-line measure of profit
Related Terms:Gross profit margingross profit divided by sales, which is equal to each sales dollar left over after paying Gross Profit Margingross profit divided by revenue. After-tax profit marginThe ratio of net income to net sales. Before-tax profit marginThe ratio of net income before taxes to net sales. Book profitThe cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT. Buy on marginA transaction in which an investor borrows to buy additional shares, using the shares cash flow from operating activities, or cash flow from profitThis equals the cash inflow from sales during the period minus the cash ![]() Contribution marginThe difference between variable revenue and variable cost. contribution marginAn intermediate measure of profit equal to sales revenue contribution marginthe difference between selling price and Contribution marginThe margin that results when variable production costs are subtracted contribution margin ratiothe proportion of each revenue dollar remaining after variable costs have been covered; Controllable profitThe profit made by a division after deducting only those expenses that can be controlled by the Cost–volume–profit analysis (CVP)A method for understanding the relationship between revenue, cost and sales volume. cost-volume-profit (CVP)analysis a procedure that examines Dollar safety marginThe dollar equivalent of the safety cushion for a portfolio in a contingent immunization ![]() EBITDA MarginEBITDA divided by total sales or total revenue. Effective margin (EM)Used with SAT performance measures, the amount equaling the net earned spread, or Gross Domestic ProductTotal output of final goods and services produced within a country during a year. Gross domestic product (GDP)The market value of goods and services produced over time including the Gross interestInterest earned before taxes are deducted. Gross marginRevenues less the cost of goods sold. Gross National ProductTotal output of final goods and services produced by a country's citizens during a year. Gross national product (GNP)Measures and economy's total income. It is equal to GDP plus the income Gross PayThe amount of earnings due to an employee prior to tax and other deductions. GROSS PROFITThe profit a company makes before expenses and taxes are taken away. Gross profitThe difference between the price at which goods or services are sold and the cost of sales. ![]() Gross profitThe result of subtracting cost of goods sold from sales. Synonymous with gross margin. Gross ProfitRevenue less cost of goods sold. Gross salesThe total sales recorded prior to sales discounts and returns. Gross spreadThe fraction of the gross proceeds of an underwritten securities offering that is paid as Initial margin requirementWhen buying securities on margin, the proportion of the total market value of Maintenance margin requirementA sum, usually smaller than -but part of the original margin, which must MarginThis allows investors to buy securities by borrowing money from a broker. The margin is the MarginThe amount added to a lower figure to reach a higher figure, expressed as a percentage of the higher figure, e.g. the margin that profit represents as a percentage of selling price. Margin account (Stocks)A leverageable account in which stocks can be purchased for a combination of Margin callA demand for additional funds because of adverse price movement. Maintenance margin Margin of safetyA measure of the difference between the anticipated and breakeven levels of activity. margin of safetythe excess of the budgeted or actual sales Margin requirement (Options)The amount of cash an uncovered (naked) option writer is required to Margin Tax RateThe tax rate applicable to the last unit of income. MarginalIncremental. Marginal costThe cost of producing one extra unit. Marginal costThe incremental change in the unit cost of a product as a result of a Marginal Propensity to ConsumeFraction of an increase in disposable income that is spent on consumption. Marginal Propensity to ImportFraction of an increase in disposable income that is spent on imports. Marginal Propensity to SaveFraction of an increase in disposable income that is saved. Marginal tax rateThe tax rate that would have to be paid on any additional dollars of taxable income earned. marginal tax rateAdditional taxes owed per dollar of additional income. Marginal Tax RatePercent of an increase in income paid in tax. Net operating marginThe ratio of net operating income to net sales. Net profitSee operating profit. Net profit marginNet income divided by sales; the amount of each sales dollar left over after all expenses Operating profitThe profit made by the business for an accounting period, equal to gross profit less selling, finance, administration etc. expenses, but before deducting interest or taxation. operating profitSee earnings before interest and income tax (EBIT). Operating profit marginThe ratio of operating margin to net sales. Original marginThe margin needed to cover a specific new position. Related: margin, security deposit (initial) phantom profita temporary absorption costing profit caused product contribution marginthe difference between selling price and variable cost of goods sold product line marginsee segment margin PROFITWhat’s left over after you subtract the cost of goods sold and all your expenses from sales. ProfitThe difference between income and expenses. profitThe general term profit is not precisely defined; it may refer to net Profit and Loss accountA financial statement measuring the profit or loss of a business – income less expenses – for an accounting period. profit and loss statement (P&L statement)This is an alternative moniker Profit before interest and taxes (PBIT)See EBIT. profit centera responsibility center in which managers are responsible for generating revenues and planning and controlling all expenses Profit centerAn entity within a corporation against which both revenues and costs are Profit centreA division or unit of an organization that is responsible for achieving profit targets. Profit marginIndicator of profitability. The ratio of earnings available to stockholders to net sales. profit marginthe ratio of income to sales Profit Margin RatioA measure of how much profit is earned on each dollar of sales. It profit moduleThis concept refers to a separate source of revenue and profit ratiosRatios based on sales revenue for a period. A measure of profit sharingan incentive payment to employees that is Profit Sharing PlanA retirement plan generally funded by a percentage of company profit-volume grapha visual representation of the amount Profitability indexThe present value of the future cash flows divided by the initial investment. Also called Profitability indexSee cash value added. Profitability IndexA method for determining the profitability of an investment. It is profitability indexRatio of net present value to initial investment. profitability index (Pl)a ratio that compares the present value of net cash flows to the present value of the net investment Profitability ratiosRatios that focus on the profitability of the firm. profit margins measure performance pseudo microprofit centera center for which a surrogate real microprofit centera center whose output has a market value Retained profitsThe amount of profit after deducting interest, taxation and dividends that is retained by the business. Risk-adjusted profitabilityA probability used to determine a "sure" expected value (sometimes called a segment marginthe excess of revenues over direct variable expenses and avoidable fixed expenses for a particular segment total contribution marginsee contribution margin unit marginThe profit per unit sold of a product after deducting product Variation marginAn additional required deposit to bring an investor's equity account up to the initial margin Breakeven pointThe sales level at which a company, division, or product line makes a product costThis is a key factor in the profit model of a business. Product Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |