Margin Definition:
Margin can be defined as net operating income divided by sales.
Margin = Net operating income / Sales
Sales include all cash as well as credit sales.
Example:
A company’s net operating income is $10,000. Total sales for the year were $30,000.
Required: Calculate margin.
Margin = Net operating income / Sales
$10,000 / $30,000
0.33
or
33%
Jennifer edwards