The profit margin is the measure of profit relative to revenue after deducting expenses. The three main profit margin metrics are:
→ gross profit margin
→ operating profit margin
→ net profit margin
By measuring the profit margin, companies can better analyze and make decisions, and it helps solve financial problems faster. Also, good margins are positive signs for investors.
Watch the video below by One Minute Economics for examples: https://www.youtube.com/watch?v=esdCHrh40Sc
"How to Determine Profit Margin for Your Small Business in 3 Simple Steps" by Mike Kappel on patriotsoftware.com
"Profit Margin" on corporatefinanceinstitute.com