does the profit margin include all the costs( fixed costs)?
profit margin
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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.
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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.
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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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but as an accountant l know the concept gross profit only include the COGS