Profit Margin

Definition of Profit Margin

noun

conveys the relative profitability of a firm, business, or person by accounting for revenue less expenses

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Although the most important metric in personal finance, Profit Margin is relatively simple and straight-forward. In order to calculate Profit Margin, all you have to do is add up all your sources of income and subtract all of your expenses. The hard part? Putting together an accurate representation of your income and expenses (don't worry, we have other sections for that).

So why bother with an entire page about Profit Margin? Well for one, it completes the picture of the P&L. And two, it is a nice way to remind the reader the importance of Profit Margin. The larger the margin, the more you can do with your finances. And if your margin is negative, well then we need to get to work to get you into the positive. 

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So we leave you with this: make Profit Margin your goal, your benchmark for success, and the way you can compete against yourself to get better each day. 

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Yeah I know, I sold you short on this page. But I rather this page be short and sweet and a bit underwhelming than to load you up with pointless information to make me sound smart. Hope this helps you in your journey.