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Financial Terms | |
Margin |
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Definition of MarginMarginThe 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. MarginThis allows investors to buy securities by borrowing money from a broker. The margin is the
Related Terms:After-tax profit marginThe ratio of net income to net sales. Before-tax profit marginThe ratio of net income before taxes to net sales. Buy on marginA transaction in which an investor borrows to buy additional shares, using the shares 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; 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 marginRevenues less the cost of goods sold. gross margin, or gross profitThis first-line measure of profit 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. ![]() 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 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 profit marginNet income divided by sales; the amount of each sales dollar left over after all expenses 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) product contribution marginthe difference between selling price and variable cost of goods sold product line marginsee segment margin 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 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 ARMAdjustable rate mortgage. A mortgage that features predetermined adjustments of the loan interest rate Average Propensity to ConsumeRatio of consumption to disposable income. See also marginal propensity to consume. Average Propensity to SaveRatio of saving to disposable income. See also marginal propensity to save. breakeven pointThe annual sales volume level at which total contribution Breakeven pointThe sales level at which a company, division, or product line makes a Call a. An option to buy a certain quantity of a stock or commodity for a Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance cost-plus contracta contract in which the customer agrees degree of operating leveragea factor that indicates how a percentage change in sales, from the existing or current Du Pontmodel a model that indicates the return on investment Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms Economies of scaleThe decrease in the marginal cost of production as a plant's scale of operations increases. Exempt securitiesInstruments exempt from the registration requirements of the Securities Act of 1933 or the Futures commission merchantA firm or person engaged in soliciting or accepting and handling orders for Gross profitThe result of subtracting cost of goods sold from sales. Synonymous with gross margin. HaircutThe margin or difference between the actual market value of a security and the value assessed by the Income statementA financial report that summarizes a company’s revenue, cost of Indented bill of materialA bill of material reporting format under which successively Investor's equityThe balance of a margin account. Related: buying on margin, initial margin requirement. Mortgage-Backed Securities Clearing CorporationA wholly owned subsidiary of the Midwest Stock MPCSee marginal propensity to consume. Net Present Value (NPV) MethodA method of ranking investment proposals. NPV is equal to the present value of the future returns, discounted at the marginal cost of capital, minus the present value of the cost of the investment. product costThis is a key factor in the profit model of a business. Product profitThe general term profit is not precisely defined; it may refer to net profit moduleThis concept refers to a separate source of revenue and profit ratiosRatios based on sales revenue for a period. A measure of Profitability ratiosRatios that focus on the profitability of the firm. Profit margins measure performance Security deposit (initial)Synonymous with the term margin. A cash amount of funds that must be deposited Security deposit (maintenance)Related: Maintenance margin security market line (SML). A description of Settlement priceA figure determined by the closing range which is used to calculate gains and losses in Spread incomeAlso called margin income, the difference between income and cost. For a depository Target costingA method of costing that is concerned with managing whole-of-life costs of a product/service during the product design phase – the difference between target price (to achieve market share) and the target profit margin. Target zone arrangementA monetary system under which countries pledge to maintain their exchange rates variable cost ratiothe proportion of each revenue dollar Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |