Profit Margin Calculation

Profit margin is a way to measure how much profit a business makes from its sales. It's calculated by dividing the net profit (the money left after all expenses) by the total sales revenue, then multiplying by 100 to get a percentage. For example, a 20% profit margin means that for every dollar earned from sales, the business keeps 20 cents as profit. This metric helps assess the efficiency of a company's operations and pricing strategies, indicating how well it is turning sales into profits.