|gross margin, or gross profit|
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Definition of gross margin, or gross profit
gross margin, or gross profit
This first-line measure of profit
gross profit divided by sales, which is equal to each sales dollar left over after paying
gross profit divided by revenue.
The ratio of net income to net sales.
The ratio of net income before taxes to net sales.
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
A transaction in which an investor borrows to buy additional shares, using the shares
The difference between variable revenue and variable cost.
The dollar equivalent of the safety cushion for a portfolio in a contingent immunization
Used with SAT performance measures, the amount equaling the net earned spread, or
The market value of goods and services produced over time including the
Interest earned before taxes are deducted.
Measures and economy's total income. It is equal to GDP plus the income
The fraction of the gross proceeds of an underwritten securities offering that is paid as
When buying securities on margin, the proportion of the total market value of
A sum, usually smaller than -but part of the original margin, which must
This allows investors to buy securities by borrowing money from a broker. The margin is the
Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of
A demand for additional funds because of adverse price movement. Maintenance margin
Margin requirement (Options)
The amount of cash an uncovered (naked) option writer is required to
Marginal tax rate
The tax rate that would have to be paid on any additional dollars of taxable income earned.
Net operating margin
The ratio of net operating income to net sales.
Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses
Operating profit margin
The ratio of operating margin to net sales.
The margin needed to cover a specific new position. Related: margin, security deposit (initial)
Indicator of profitability. The ratio of earnings available to stockholders to net sales.
The present value of the future cash flows divided by the initial investment. Also called
Ratios that focus on the profitability of the firm. profit margins measure performance
A probability used to determine a "sure" expected value (sometimes called a
An additional required deposit to bring an investor's equity account up to the initial margin
The profit a company makes before expenses and taxes are taken away.
What’s left over after you subtract the cost of goods sold and all your expenses from sales.
The 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.
The difference between the price at which goods or services are sold and the cost of sales.
The 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.
The cost of producing one extra unit.
Margin of safety
A measure of the difference between the anticipated and breakeven levels of activity.
See operating profit.
The 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.
The difference between income and expenses.
Profit and Loss account
A financial statement measuring the profit or loss of a business – income less expenses – for an accounting period.
Profit before interest and taxes (PBIT)
A division or unit of an organization that is responsible for achieving profit targets.
See cash value added.
The amount of profit after deducting interest, taxation and dividends that is retained by the business.
The result of subtracting cost of goods sold from sales. Synonymous with gross margin.
cash flow from operating activities, or cash flow from profit
This equals the cash inflow from sales during the period minus the cash
An intermediate measure of profit equal to sales revenue
See earnings before interest and income tax (EBIT).
The general term profit is not precisely defined; it may refer to net
profit and loss statement (P&L statement)
This is an alternative moniker
This concept refers to a separate source of revenue and
Ratios based on sales revenue for a period. A measure of
The profit per unit sold of a product after deducting product
Profit Margin Ratio
A measure of how much profit is earned on each dollar of sales. It
A method for determining the profitability of an investment. It is
the difference between selling price and
contribution margin ratio
the proportion of each revenue dollar remaining after variable costs have been covered;
analysis a procedure that examines
margin of safety
the excess of the budgeted or actual sales
a temporary absorption costing profit caused
product contribution margin
the difference between selling price and variable cost of goods sold
product line margin
see segment margin
a responsibility center in which managers are responsible for generating revenues and planning and controlling all expenses
the ratio of income to sales
an incentive payment to employees that is
a visual representation of the amount
profitability index (Pl)
a ratio that compares the present value of net cash flows to the present value of the net investment
pseudo microprofit center
a center for which a surrogate
real microprofit center
a center whose output has a market value
the excess of revenues over direct variable expenses and avoidable fixed expenses for a particular segment
total contribution margin
see contribution margin
The margin that results when variable production costs are subtracted
Revenues less the cost of goods sold.
The total sales recorded prior to sales discounts and returns.
The incremental change in the unit cost of a product as a result of a
An entity within a corporation against which both revenues and costs are
marginal tax rate
Additional taxes owed per dollar of additional income.
Ratio of net present value to initial investment.
Gross Domestic Product
Total output of final goods and services produced within a country during a year.
Gross National Product
Total output of final goods and services produced by a country's citizens during a year.
Marginal Propensity to Consume
Fraction of an increase in disposable income that is spent on consumption.
Marginal Propensity to Import
Fraction of an increase in disposable income that is spent on imports.
Marginal Propensity to Save
Fraction of an increase in disposable income that is saved.
Marginal Tax Rate
Percent of an increase in income paid in tax.
The amount of earnings due to an employee prior to tax and other deductions.
Profit Sharing Plan
A retirement plan generally funded by a percentage of company
EBITDA divided by total sales or total revenue.
Revenue less cost of goods sold.
Margin Tax Rate
The tax rate applicable to the last unit of income.
This is a key factor in the profit model of a business. Product
The sales level at which a company, division, or product line makes a
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