Contribution margin is the amount of money left over from sales after deducting variable costs. It represents the portion of sales that helps cover fixed costs and eventually contributes to profit. By ...

When you run a small business, it's important to always know your break-even point -- the amount of sales needed to pay for all of your costs in a period. Below break-even, you generate a loss; above ...

Profit is the ultimate goal for any business. Business owners selling goods or services use the unit contribution margin to determine the profit per unit. It is calculated as a percentage or dollar ...

Traditional and contribution margin income statements provide a detailed picture of a company's finances for a given period of time. While both serve the purpose of showing whether a company has a net ...

Both metrics assess a company's profitability, but in different ways Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor.

Portions of this article were drafted using an in-house natural language generation platform. The article was reviewed, fact-checked and edited by our editorial staff. Contribution margin is used to ...