profit margin

Oliver Wyman case: On the Right Track
New answer on Jun 27, 2021
3 Answers
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Yosha asked on Jun 21, 2021

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

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Ian
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replied on Jun 22, 2021
MBB | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

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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Yosha on Jun 22, 2021

but as an accountant l know the concept gross profit only include the COGS

Pedro
Expert
replied on Jun 21, 2021
Bain | EY-Parthenon | Roland Berger |Former Head Recruiter | Market Sizing

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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Henning
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replied on Jun 27, 2021
Bain | passed >15 MBB interviews as a candidate

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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Ian gave the best answer

Ian

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