What is profit margin?
Profit margin (definition)
Profit margin is the percentage of revenue left after paying business expenses.
There are two main types of profit margin.
- Gross profit margin – the portion of income left after paying for the goods and services you sell
- Net profit margin – the portion of income left after paying all costs and taxes
As a result, your gross profit margin will be larger than your net profit margin.
Profit margin is simply profit shown as a percentage of revenue