Profit margin
How many cents of each sales dollar end up as profit.
A company with $100 of sales and $25 of profit has a 25% margin: it keeps 25¢ of every $1. Gouda’s “Where the money goes” section shows this for every company.
Examples from real companies
- Nvidia (NVDA): Over the last 12 months, each share of Nvidia earned $7.91 of profit on $12.42 of sales, keeping about 64¢ of every $1 (profit margin).
- Visa (V): Over the last 12 months, each share of Visa earned $11.74 of profit on $23.13 of sales, keeping about 51¢ of every $1 (profit margin).
- Coca Cola (KO): Over the last 12 months, each share of Coca Cola earned $3.18 of profit on $11.43 of sales, keeping about 28¢ of every $1 (profit margin).
More investing words
Profit per share (EPS)P/E ratioBook value per shareFree cash flowCapital spending (capex)DividendDividend yieldPayout ratioShare buybackDilutionRevenue (sales)DebtMarket capitalization10-K and 10-Q reportsStock split
For education only, not investment advice.