profit margins definition. A good definition of profit is "the reward or return for taking risks & making investments". For most businesses, making a profit is a key objective. You also need to appreciate that profit is also the most important source of cash flow & finance for a business. A firm’s net profit margin is a key indicator of its profitability. Analyzing it can tell potential investors whether the business may be a good bet. A company's operating margin is the profit it makes on a dollar of sales after accounting for the direct costs involved in earning the revenue.
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What is the difference between gross profit and net profit? A: Gross profit is the profits earned after deducting the costs of producing, whereas net income is the company's profit after deducting all the expenses from revenue. Profit margin is a measure of how much money a company is making on its products or services after subtracting all of the direct and indirect costs involved. It is expressed as a percentage. Profit - What is it? | Reference Library | Business | tutor2u
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