When you own a business, you need to understand how much money you make compared to how much you spend. That means you need to grasp profit margins. But while it’s crucial to know how to calculate ...

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 ...

Gross profit margin is a ratio that measures the percentage of revenue left after subtracting production costs. By indicating ...

Gross margin is one of three profit margin measurements. Although each is significant and directly impacts the ability to manage a business, set accurate prices and achieve success, the U.S. Small ...

Gross profit margin shows how much profit a company keeps from each revenue dollar. Higher gross profit margins indicate more efficient cost management. Comparing margins with competitors assesses ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Vikki Velasquez is a researcher and writer ...

Profit is a key indicator of a company’s long-term viability and success. Understanding your small business’s profitability can help with cost-cutting, pricing, and investment decisions. Here’s ...