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.

If you have $100,000 in pretax profit, that's better than running in the red – but is it good enough? That's where the pretax margin calculation comes in by transforming the dollar amount into a ...

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 ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Michael Boyle is an experienced financial ...

Net income seems straightforward: It is the result when expenses (administrative expenses, business expenses, interest expenses, operating costs and other expenses) are subtracted from revenue. This ...

To run a company successfully, you need to know everything about your business, including its financials. One of the most critical financial metrics to grasp is the contribution margin, which can help ...

To analyze a business’s profitability, the financial statements must be looked at to understand better where the company is succeeding. Looking at the chart of accounts provides a clear understanding ...

Concession services offer food and occasionally souvenirs from trailers located near event venues, including small sports stadiums, amusement and community parks, and school sports fields. While ...

NPV calculates profitability by considering all cash flows and the time value of money. A positive NPV indicates a potentially profitable investment opportunity. NPV's effectiveness relies on accurate ...