Margin is the difference in the value of goods on exchangebidding between the price indicated in the bulletin and the purchase price. In other words, this is the profit that firms and companies get in the process of bidding for a certain category of goods. This concept can apply, in addition to operations on the stock exchange, to operations in the trading, banking and insurance spheres. Only in this case, the margin is the difference in the price of goods, interest rates, currency and the price of securities in a particular period of time.
The concept of "margin of profit" impliesRelative income, which is calculated as a percentage of sales or capital. When using this term, one can judge the effectiveness of capital investments and other assets. A kind of profitability of the business.
Depending on the sphere used, a different margin is obtained. This is credit, bank, interest, guarantee and supported.
At the same time, credit implies the calculation of the difference in the price of the goods, which is fixed in the relevant loan agreement, and issued for the purchase of this product by a loan.
Guarantee margin is the difference between the loan collateral and the value of the loan body.
Net interest margin (or banking) isone of the key indicators of banking. This factor reflects the effectiveness of active operations conducted by the bank. Calculated by the ratio of the difference between commission (interest) income and commission (interest) expenses to bank assets.
It should be noted that the calculation of the latter typeThe margin is made in accordance with the size of the total banking assets or assets that generate revenue. Many market participants calculate this indicator, based on the value of assets that generate income.
When marketing experts and economists leadit's about the margin, you need to remember the rules for calculating it. This calculation is made as finding the difference between the coefficient of profitability and directly the very profit per unit of the commodity in the implementation. Such a difference can be easily reconciled, so it is important that managers easily know how to switch from one coefficient to another.
So, the margin ratio is calculated as the ratio of profit per unit of output to the selling price of this unit.
Using these metrics helpssolve certain tasks quickly enough. An example is the determination of the amount of profit in the presence of different volumes of output. And with the use of the amount of marginal income, it becomes possible to see the contribution of the business entity in covering the fixed costs and obtaining a certain profit.
