What is the difference between profit margin , gross margin , and revenue ?
In: 135
Revenue is total money earned from sales. Gross profit is revenue minus expenses before taxes. Profit margin is gross profit as a percent of revenue.
Imagine that you make cookies , then rent a small stand to sell them:
**Revenues** is all the money you got from customers who bought your cookies.
**Gross margin** is Revenues minus all the ingredients you bought for your cookies (flour, milk eggs, I don’t know, I’m not a good cook). It would be even simpler if you bought cookies wholesale and resold them
**Profit margin** is your Gross margin minus all the other costs : the rent fee for your stand and your wages as a baker
*Edit : I took a quite a few shortcuts / oversimplifications in that ELI5, thanks to all who took the time to clarify / specify in the comments*
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