GROSS PROFIT MARGIN ANALYSIS Definition

Bookmark and Share

GROSS PROFIT MARGIN ANALYSIS indicates what the companys pricing policy is and what the true mark-up margins are. Calculated by: Revenue - Cost of Goods Sold / Revenue. See GROSS PROFIT MARGIN ON SALES for more in-depth definition.

Learn new Accounting Terms

BASIC EARNINGS POWER (BEP) is useful for comparing firms in different tax situations and with different degrees of financial leverage. This ratio is often used as a measure of the effectiveness of operations. Basic Earning Power measures the basic profitability of Assets because it excludes consideration of interest and tax. This ratio should be examined in conjunction with turnover ratios to help pinpoint potential problems regarding asset management. Formula: EBIT / Total Assets

HARD ASSETS are physical assets (land, buildings, equipment) and financial assets (cash, credit, financial instruments). Hard assets are usually on the records of account in an organization and subjected to inventory and/or custodial safeguards. See also SOFT ASSETS.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.