Course 108: Learn the Lingo--Basic Ratios
Profit Margins
In this course
1 Introduction
2 Earnings Per Share
3 Market Capitalization
4 Profit Margins
5 Price/Earnings and Related Ratios
6 Price/Sales Ratio
7 Price/Book Ratio
8 Price/Cash Flow
9 Dividend Yield
10 The Bottom Line

Just as there are three types of profits--gross, operating, and net--there are also three types of profit margins that can be calculated to offer insight into a company's profitability. Gross margin is simply gross profits divided by revenues, and so on. Margins are usually stated in percentages.

Gross Margin = (Gross Profits) / Revenues
Operating Margin = (Operating Profits) / Revenues
Net Margin = (Net Profits) / Revenues

Next: Price/Earnings and Related Ratios >>


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