profit-margin

Vocabulary Word

Definition

'Profit-margin' is a term used in business. It is the difference between the cost of producing or buying a product and the price it's sold for. It's an important number to know because it tells how much profit a business makes for each unit sold.

Examples in Different Contexts

For social enterprises, 'profit margins' are important for sustainability. A social entrepreneur might say, 'By improving our profit margins, we can reinvest more in our community programs.'

Practice Scenarios

Tech

Scenario:

Our software development cost has increased significantly. We need to streamline our process to make it more cost-effective.

Response:

Yes, reducing overall development time and increasing automation might help us increase the profit-margin on our software.

Business

Scenario:

Our company's financial health is on the decline. Our operating costs are rocketing and we need to turn things around.

Response:

We can try to increase our profit-margin by sourcing cheaper materials without compromising on quality.