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Profit Margin (often abbreviated to “margin”) is the difference between how much revenue you capture and how much you spend to capture it, expressed in percentage terms. Here's the formula for Profit Margin: ((Revenue - Cost) / Revenue) * 100 = % Profit Margin. If you spend $1 to get $2, that’s a 50 percent Profit Margin.
Let’s understand this in steps; Step First : Let’s understand what is meaning of profit: Profit = Sell Price minus Cost Price. If you are selling a pen at Rs 100 and its cost is 80, profit is Rs. 100 minus Rs. 80 = Rs. 20. Step Second : Let’s unde...