Most small businesses start as "flying by the seat of your pants" operations, with little use of data for decision making. As the business grows, however, it becomes essential to introduce ways of ...

Inventory is an asset. Figuring its value is important when you're running financial metrics, just like knowing the value of your factory or the expense of administrative overhead. The gross profit ...

Learn about gross, operating, and net profit margins, how each is calculated, and how businesses and investors can use them to analyze a company’s profitability.

Gross profit margin is a ratio that measures the percentage of revenue left after subtracting production costs. By indicating the profitability of a company's core business operations, gross profit ...

Gross margin measures the percentage of revenue after direct costs are subtracted. Calculating gross margin involves subtracting COGS from revenue and dividing by total revenue. High gross margin ...

Profit is an essential component of any business operation. It indicates the business's financial success and allows owners to continue running their companies. Understanding how to calculate profit ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

Companies need to generate profit to stay afloat. They do this by producing goods or services and selling them for more than it costs to produce them. This difference is the company’s gross profit: ...

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For companies that sell more than one product, it is helpful to calculate how much each individual product contributes to the overall company's sales and profits. To do that, we calculate the margin ...