|Operating profit margin|
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Definition of Operating profit margin
Operating profit margin
The ratio of operating margin to net sales.
The ratio of net income to net sales.
For investment companies, the management fee and "other expenses,"
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
This equals the cash inflow from sales during the period minus the cash
With some exceptions, the cash effects of transactions
The difference between variable revenue and variable cost.
An intermediate measure of profit equal to sales revenue
the difference between selling price and
The margin that results when variable production costs are subtracted
the proportion of each revenue dollar remaining after variable costs have been covered;
The profit made by a division after deducting only those expenses that can be controlled by the
A method for understanding the relationship between revenue, cost and sales volume.
analysis a procedure that examines
degree of operating leverage
a factor that indicates how a percentage change in sales, from the existing or current
degree of operating leverage (DOL)
Percentage change in profits given a 1 percent change in sales.
Dollar safety margin
The dollar equivalent of the safety cushion for a portfolio in a contingent immunization
EBITDA divided by total sales or total revenue.
Effective margin (EM)
Used with SAT performance measures, the amount equaling the net earned spread, or
Revenues less the cost of goods sold.
gross margin, or gross profit
This first-line measure of profit
The profit a company makes before expenses and taxes are taken away.
The difference between the price at which goods or services are sold and the cost of sales.
The result of subtracting cost of goods sold from sales. Synonymous with gross margin.
Revenue less cost of goods sold.
Gross profit margin
Gross profit divided by sales, which is equal to each sales dollar left over after paying
Gross Profit Margin
Gross profit divided by revenue.
Initial margin requirement
When buying securities on margin, the proportion of the total market value of
Maintenance margin requirement
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
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.
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 of safety
A measure of the difference between the anticipated and breakeven levels of activity.
margin of safety
the excess of the budgeted or actual sales
Margin requirement (Options)
The amount of cash an uncovered (naked) option writer is required to
Margin Tax Rate
The tax rate applicable to the last unit of income.
The cost of producing one extra unit.
The incremental change in the unit cost of a product as a result of a
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
The tax rate that would have to be paid on any additional dollars of taxable income earned.
marginal tax rate
Additional taxes owed per dollar of additional income.
Marginal Tax Rate
Percent of an increase in income paid in tax.
Net operating losses
Losses that a firm can take advantage of to reduce taxes.
Net operating margin
The ratio of net operating income to net sales.
See operating profit.
Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses
Includes all the sales and expense activities of a business.
a budget expressed in both units and dollars
Operating cash flow
Earnings before depreciation minus taxes. It measures the cash generated from
operating cash flow
See cash flow from operating activities.
Operating Cash Flow
Income available after the payment of taxes, plus the value of the
The average time intervening between the acquisition of materials or services and the final
A term frequently used to describe earnings after the removal of the
Any expense associated with the general, sales, and administrative
The total amount that was spent to run a company this year.
The amount of money the company must spend on overhead, distribution, taxes, underwriting the risk and servicing the policy. It is a factor in calculating premium rates.
Degree to which exchange rate changes, in combination with price changes, will alter a
The net income of a business, less the impact of any financial activity,
A measure of results produced by the core operations of a firm. It is common
Short-term, cancelable lease. A type of lease in which the period of contract is less than the
The rental of an asset from a lessor, but not under terms that would
One where the risks and benefits, as well as ownership, stays with the lessor.
Fixed operating costs, so-called because they accentuate variations in profits.
A relatively small percent increase or decrease in
the proportionate relationship between
Degree to which costs are fixed.
Operating Line of Credit
A bank's commitment to make loans to a particular borrower up to a specified maximum for a specified period, usually one year.
A loan advanced under an operating line of credit.
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.
See earnings before interest and income tax (EBIT).
The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is
operating risk (business risk)
Risk in firm’s operating income.
The margin needed to cover a specific new position. Related: margin, security deposit (initial)
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
What’s left over after you subtract the cost of goods sold and all your expenses from sales.
The difference between income and expenses.
The general term profit is not precisely defined; it may refer to net
Profit and Loss account
A 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)
a responsibility center in which managers are responsible for generating revenues and planning and controlling all expenses
An entity within a corporation against which both revenues and costs are
A division or unit of an organization that is responsible for achieving profit targets.
Indicator of profitability. The ratio of earnings available to stockholders to net sales.
the ratio of income to sales
Profit Margin Ratio
A measure of how much profit is earned on each dollar of sales. It
This concept refers to a separate source of revenue and
Ratios based on sales revenue for a period. A measure of
an incentive payment to employees that is
Profit Sharing Plan
A retirement plan generally funded by a percentage of company
a visual representation of the amount
The present value of the future cash flows divided by the initial investment. Also called
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