Continue reading the main story. 1  AMID the squawks and pings of our digital devices, the old-fashioned virtues of reading novels can seem faded, even futile. 2  Brain scans are revealing what happens in our heads when we read a detailed description, an evocative metaphor or an emotional exchange between characters.
One metric that investors use to evaluate companies and industries is profit margin, which speaks of the company's ability to manage its cost and effectively price its products. In May 2015, the profit margin for companies in the food and beverage sector ranged from -24.1% to 24%. The average profit margin was 5.2%.Profit margin is calculated as net income divided by the company's total revenues.n May 2015, the profit margin for companies in the food and beverage sector ranged from -24.1% to 24%. The average profit margin was 5.2%.
Gross Margin. Gross margin represents the percentage of net sales that the firm takes in as gross profit. It equals gross profit divided by net sales. If you have sold $500,000 worth of product, and the cost of goods sold is $300,000, the gross profit is $200,000. The gross margin is $200,000 divided by $500,000 which equals 40 percent. A business should not focus on gross margin exclusively, since you can increase gross margin but end up with less in gross profits. If your gross profits drop to $170,000 and sales decline to $400,000, gross margin would be higher, at 42.5 percent, yet gross profits would be $30,000 lower. Contribution Margin Contribution margin is a more relevant measure to assess the profitability of additional products sold, and only takes into account variable costs.