Profit margin says a lot about how business is doing. At its most basic, profit margin determines whether you're hemorrhaging money or if you have the reserves to install that shiny new advertising campaign you've had your eye on for months. There are two types “profit margin” to keep your eye on. Gross profit margin compares sales to the cost of everything that goes into making food. Net profit is much more relevant toward building a better business because it captures all of your expenses, not purely sales. Net Profit Margin = (Revenue - All Costs) / Revenue 5% profit margin is a... read more »