Talk:Profit margin

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I thought "profit margin" referred to Net Income/Revenue, not EBIT/Revenue. I understand why someone would use that ratio, but the discrepency at least needs to be addressed. -- John D. 28 June 2006

Yes, indeed, you are correct. Margins are differences; or derivatives, (limit of a difference quotient), in mathematical economics.

Margins, are not ratios. (Net income)/Revenue = "Return on revenue" (or, "sales"), is a rough measure of profitability; but analytically distinct from margin.

EBIT/Revenue is merely an approximation of operating cash flow divided by revenue; and is used when a historical Cash Flow Statement is not available.

--Lance ^talk 02:16, 12 October 2006 (UTC)

In my opinion, this Formula is wrong. For me Profit margin is: gross profit divided by sales. This makes more sense, because your result will be a percentage between 0 and 100 %. —Preceding unsigned comment added by 194.145.96.51 (talk) 18:35, 20 January 2008 (UTC)

I think the "x100%" causes confusion. "100%" is 1 and multiplying anything by one is... well, it's not wrong, but it's kind of a waste of time. Yeah, multiplying by 100 is what you do to express a number as a percentage, but the actual profit margin number should remain below 1. Numerical grammaticians? ---Ransom (--67.91.216.67 (talk) 22:23, 18 February 2011 (UTC))

right and in the example in the article, it says on top that you divide by net sales revenue, yet the equation uses 10 which is gross sales revenue. —Preceding unsigned comment added by Jnatch (talk • contribs) 21:14, 23 April 2008 (UTC)

The formalue in this article is highly inaccurate. I am looking at formalue sheets issued by the University of Auckland for tests and exams, and the formalue given is very clearly EBIT / Revenue for "Profi Margin". You do NOT deduct tax and interest for Profit Margin. —Preceding unsigned comment added by 121.74.177.84 (talk) 05:05, 19 April 2011 (UTC)

What does this mean?

I just don't understand this sentence: "While selling something one should know what percentage of profit will he get on a particular investment so companies calculate profit percentage to check what is ratio of profit on the basis of cost." It seems like several questions rolled into one without a question mark, but each time I read it I just get more confused. 81.224.119.207 (talk) 10:15, 22 June 2014 (UTC)

Double negative in last sentence?

I'm no money magician but "a −50% loss on ROI" sounds like a double negative.

It's like when I would say I lost -5 pounds because in the end if would just mean that I gained 5 pounds

margin vs. percentage

Is it convention to represent fractions as percentages in economics?

I already find it confusing that the profit 'percentage' is calculated as a fraction, but pops out as a percentage. But when the term switches to profit 'margin', it also turns out to be a percentage.

So either the 'margin' should be a fraction, or the calculations should specify a multiplication by 100% as is done in the example. — Preceding unsigned comment added by DrSliert (talk • contribs) 10:05, 30 November 2021 (UTC)

Different page for net profit margin

This page is named profit margin which is of 3 types including net profit margin. The net profit margin also directs to this page only. There should be a separate page for net profit margin — Preceding unsigned comment added by S4637762 (talk • contribs) 01:51, 23 March 2022 (UTC)

Net profit

The calculation of net profit is missing. Theking2 (talk) 17:19, 20 November 2022 (UTC)