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profit margin

does the profit margin include all the costs( fixed costs)?

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Ian
Coach
am 22. Juni 2021
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi there,

Remember there is gross profit margin and a product's profit margin.

Gross profit margin takes into account all costs. A product's profit margin takes into account its attributable costs, aka COGS.

am 22. Juni 2021
but as an accountant l know the concept gross profit only include the COGS
Pedro
Coach
am 21. Juni 2021
Bain | EY-Parthenon | Former Principal | 1.5h session | 30% discount 1st session

Yes, profit margin concept includes all costs.
If you only want to consider variable costs on the margin, then you are referring to CONTRIBUTION margin.

Gelöschter Nutzer
am 27. Juni 2021

Check out Investopedia for details on financial metrics. Bottom line is that there are many different types of profit margins. Operating margin, contribution margin, Gross margin, net margin.

Of these, operating, contribution and gross margins would include variable costs only,  net margin will include all costs.

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