Gross Profit Margin

Definition

  • The difference between the sales generated by a business and the costs paid out for goods or services.

Synonyms
percentage margins, total revenue, gross profit rate, unit margins, gross margin

Related Terms and Acronyms

  • Accounts Payable (A/P, AP) Acronym,
    • Money owed by a business for goods and services received.
  • Accounts Receivable (AR, A/R) Acronym, Important,
    • Money owed to a business by purchasers of goods and/or services.
  • Adjusted Cost Basis Definition,
    • The amount paid for an item, plus the amount paid for improvements, minus losses and depreciation. When the owner sells the item, the difference between the sales price and the adjusted cost basis is the profit or loss.
  • Break-Even Point (BEP) Acronym,
    • The point at which expenses meet income or savings. In home finance, the break-even point often refers to the time it takes to recoup the costs of refinancing a loan or paying discount points.
  • Cash Flow Forecast Definition,
    • An estimate of when and how much money will be received and paid out of a business. It usually records cash flow on a month-by-month basis for a period of two years.
  • Cost of Goods Sold (COGS) Acronym,
    • An expense that appears on a business's income statement and represents the inventory cost of the goods sold during a particular period.
  • Net Interest Margin (NIM) Acronym,
    • Net interest income (the difference between interest income and interest expense) as a percentage of average total assets.
  • Net Operating Loss (NOL) Acronym, Very Important,
    • A net loss for the tax year because of business or casualty losses. Taxpayers may use an excess loss of one year as a deduction for certain past or future years.
  • Operating Cash Flow (OCF) Acronym,
    • The money a company generates from its business operations. This revenue excludes costs from certain investments.
  • Pre-Tax Operating Income (PTOI) Acronym,
    • The operating income generated by a company, less expenses, before taxes have been paid.
  • Retained Earnings Definition,
    • All of the profits or losses accumulated from prior years and from the present year's income statement, minus dividends paid to you.
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