What is profit margin?
Profit margin is the percentage of your revenue that remains as profit after costs: margin = (profit ÷ revenue) × 100. It answers the question volume hides — does this business make money on each sale?
Gross versus net
Gross margin subtracts only the direct costs of delivering the product or service. Net margin subtracts everything — rent, salaries, tools, taxes. A healthy gross margin with a thin net margin means overhead, not the offer, is the problem.
Tracking margin in practice
Margin is only knowable if costs are recorded and categorized. When payables carry categories in an ERP like ERP Mobi, the 'where does the money go' half of the margin equation stops being a guess.