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How is margin different from profit?

Asked 2 years ago

I watched a Youtube video on profit margins when they said margin is different from profit. This I don't understand? I get that you get profit margins, etc. But how can they be separated?

Ali Reyes

Wednesday, April 20, 2022

Margin and profit are commonly used financial terminologies with a slight difference. Below are the top 3 differences for you to comprehend margin and profit better:

  1. Margin measures the business's success in terms of percentage, whereas profit measures it in terms of dollars.
  2. Margin provides the information in a relative context, while profit provides the information in an absolute context.
  3. In terms of usage, the margin mainly looks at the efficiency and effectiveness of a venture. On the other hand, profit is used for assessing business performance from a monetary perspective.

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