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Margin
Business
WHAT IS IT?
Margin describes the amount left between a selling price or revenue figure and the relevant cost, often expressed as a percentage.
IN PLAIN ENGLISH
It shows what is left after a particular set of costs.
SIMPLE EXAMPLE
A £100 sale with £40 of direct cost leaves £60 gross profit, giving a 60% gross margin.
WHY DOES IT MATTER
Always check which costs are included when someone talks about a margin, because gross and net margins are different.
THE ROCKET TEST
Margin shows what is left after the costs included in that particular calculation.
SEE IT IN ACTION
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