Gross margin - A company make a product worth 20Rs. This 20Rs of worth includes all costs spent by the company including the resource cost, raw material cost, infra structure cost etc. Then the company sells the product for 40Rs. So it makes a profit of 20Rs. This 20Rs is the Gross Margin on the product which the company makes.
Net Margin - Now the company after getting a 20Rs profit has to pay a tax of 5Rs, repays a loan amount of 5Rs. So the balance 10Rs is the Net Margin on the product for the Company.
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