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The term contribution margin ratio is the percentage of contribution over total revenue. It is used in cost-volume-profit analysis, a form of management accounting.

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Explain how 'segment margin' differs from 'contribution margin'?

Contribution margin is the amount remaining from sales revenue once all variable costs have been removed ie. Contribution Margin = Sales Revenue - Variable Costs Segment margin is the margin available after a segment has covered all of its costs. It's one of the best ways to determine the long-term profitability of a segment. ie. Segment Margin = Segment's Contribution Margin - Fixed Costs traced to the Segment


Why does managers use a contribution margin income statement?

Managers will use this because it separates the fixed from the variable costs. It helps them make short term decisions better by not looking at long term fixed costs which can not be easily changed.


What is margin line of a ship?

Margin line is a maritime term that pertains to ships. A margin line is described as a line that is drawn parallel to the upper surface of the bulkhead deck, but not less than 3 inches below.


If a company converts a short-term note payable into a long-term note payable what would this transaction do?

decrease the current ratio and decrease the acid-test ratio


What does the term on margin mean?

The term "on margin" refers to the practice of borrowing money from a broker to purchase securities, allowing investors to buy more stock than they could with just their own funds. This involves a margin account, where the investor deposits a portion of the total investment as collateral, while the broker lends the rest. While trading on margin can amplify potential returns, it also increases risk, as losses can exceed the initial investment. If the value of the securities falls significantly, the broker may issue a margin call, requiring the investor to deposit more funds or sell assets to cover the loan.

Related Questions

Explain how 'segment margin' differs from 'contribution margin'?

Contribution margin is the amount remaining from sales revenue once all variable costs have been removed ie. Contribution Margin = Sales Revenue - Variable Costs Segment margin is the margin available after a segment has covered all of its costs. It's one of the best ways to determine the long-term profitability of a segment. ie. Segment Margin = Segment's Contribution Margin - Fixed Costs traced to the Segment


What is the contribution margin and why is it important for managers to know the contribution margins of their products?

Contribution margin is term used in management accounting in short-term decision making. Contribution Margin = Sale price - Variable Cost It means it is a contribution by every unit sell (after recovering variable cost) towards recovering the fixed cost spend on producing the product. So at which point product recover it's full fixed cost its the break-even point where product has not profit no loss and after that point what product earns is the profit of company.


What is direct contribution margin?

Contribution Margin is found by subtracting sales by variable costs. It is what left over after you subtract these. Lets say your sales are 10 dollars a unit and your variable cost is 7 dollars per unit. your contribution margin would be 3 dollars. it can be positive or negative in the case you would be losing money. Contribution Margins are used to make short-term business decisions where your fixed costs remain constant.


What is meant by the term ratio of the end to the mean?

The term ratio of the end to the mean refers to the ratio that indicates what portion of a person's monthly income that goes towards paying debts. The credit-card payments, child support, and mortgage payments are examples of these debts.


Why does managers use a contribution margin income statement?

Managers will use this because it separates the fixed from the variable costs. It helps them make short term decisions better by not looking at long term fixed costs which can not be easily changed.


TYPES OF financial statement analysis?

There are numerous financial ratios use to analyse different aspects of a company's financial performance Profitability ratios * Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return. * Gross margin, Gross profit margin or Gross Profit Rate * Operating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS) * Profit margin, net margin or net profit margin * Return on equity (ROE) * Return on investment (ROI ratio or Du Pont ratio) * Return on assets (ROA) * Efficiency ratio * Net gearing Liquidity ratios Liquidity ratios measure the availability of cash to pay debt. * Current ratio * Acid-test ratio (Quick ratio) * Operation cash flow ratio Activity ratiosActivity ratios measure the effectiveness of the firms use of resources. * Average collection period * DSO Ratio * Average payment period * Asset turnover * Inventory turnover ratio * Receivables Turnover Ratio * Inventory conversion ratio * Inventory conversion period * Receivables conversion period * Payables conversion period Debt ratios (leveraging ratios) Debt ratios measure the firm's ability to repay long-term debt. Debt ratios measure financial leverage. * Debt ratio * Debt to equity ratio * Long-term Debt to equity (LT Debt to Equity) * Times interest-earned ratio * Debt service coverage ratio Market ratios Market ratios measure investor response to owning a company's stock and also the cost of issuing stock. * Earnings per share (EPS) * Payout ratio * Dividend cover (the inverse of Payout Ratio) * P/E ratio * Dividend yield * Cash flow ratio or Price/cash flow ratio * Price to book value ratio (P/B or PBV) * Price/sales ratio * PEG ratio


What is meant by the term fedvip?

The term FEDVIP stands for Federal Employee Dental and Vision Insurance Program. The FEDVIP is an enroll pay all program, which means there is no contribution made by the government.


What is the first term in a ratio?

Antecedent is the first term in a ratio .


What ratios are stockholders interested in?

# The current ratio # return on equity # dividend rate # Gross Margin # Net income margin # qurterly and annual growth ratios


What is the ratio of 49?

The term "ratio of 49" is somewhat ambiguous without additional context. If you're referring to the number itself, 49 can be expressed as a ratio of 49:1 or simply as 49. If you meant the ratio of 49 to another number, please specify that number for a more accurate answer.


What is meant by the term cathetarisation?

what is meant by the term catheterisation


What is the term for buying stock with borrowed money?

Margin.