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The profit margin is useful in measuring profitability as it introduces us the value of the gross profit from sales or revenue Profit margin = net profit / net sales Gross Profit = Net Sales - Cost of goods sold Net Profit = Total Revenue - Total Expenses Marginal profit = sale price of the unit - variable cost per unit (also called the profit margin)
Margin: is the difference between the price of the unit cost and selling priceGross profit: Gross margin is the profit of units soldNet Profit: is the sale price of the unit after payment of all expenses
1) Profit margin = Net Profit / Revenue
2) Gross profit (or sales profit or gross margin) = Net sales – Cost of goods sold
3) Net profit = Sales revenue - Total costs
Profit Margin = Net Profit \\ sales
Gross Profit = Sales - Cost of goods sold
Net Profit = Revenue - total expenses
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