Margin is the profit received by the enterprise in the bidding process

The margin is the difference in the value of the commodity at the exchange trades 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.

Margin in this case acts as a specific extra charge for the market participants to receive additional income.

The term "profit margin" implies relative 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 determined between the loan collateral and the value of the loan body.

The supported margin is the minimum amount on the buyer's special account until the transaction is completed.

Net interest margin (or banking) is one of the key indicators of banking activity. This coefficient reflects the effectiveness of active operations conducted by the bank. It is calculated by the ratio of the difference between commission (interest) incomes and commission (interest) expenses to bank assets.

It should be noted that the calculation of the last type of margin is made in accordance with the size of the total banking assets or assets that bring him income. Many market participants calculate this indicator, based on the value of assets that generate income.

When marketing experts and economists talk about margin, it is necessary to remember the rules for its calculation. This calculation is made as finding the difference between the coefficient of profitability and directly the very profit per unit of the product when implemented. This 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.

Managers also need to know the value of margin when making any decisions in the marketing sphere. Margin is a key factor in the cost-effectiveness of marketing services, pricing, profitability forecasting and customer profitability analysis.

Using these indicators helps to solve certain tasks quickly enough. An example is the determination of the size of the 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.