Talk:Profit margin

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I thought "profhkjhkjhkhhlhlhglglkhkljhkljhklbhjkhbgkjhjkhjkhit margin" referred to Net Income/Revenue, not EBIT/Revenue. I understand why someone would use that ratio, but the discrepency at least needs to be addressed. -- John D. 28 June 2006

Yes, indeed, you are correct. Margins are differences; or derivatives, (limit of a difference quotient), in mathematical economics.

Margins, are not ratios. (Net income)/Revenue = "Return on revenue" (or, "sales"), is a rough measure of profitability; but analytically distinct from margin.

EBIT/Revenue is merely an approximation of operating cash flow divided by revenue; and is used when a historical Cash Flow Statement is not available.

--Lance ^talk 02:16, 12 October 2006 (UTC)

In my opinion, this Formula is wrong. For me Profit margin is: gross profit divided by sales. This makes more sense, because your result will be a percentage between 0 and 100 %. —Preceding unsigned comment added by 194.145.96.51 (talk) 18:35, 20 January 2008 (UTC)

right and in the example in the article, it says on top that you divide by net sales revenue, yet the equation uses 10 which is gross sales revenue. —Preceding unsigned comment added by Jnatch (talk • contribs) 21:14, 23 April 2008 (UTC)