The traditional and contribution margin income statements both communicate a company's revenues, expenses and profits or losses for an accounting period. The top line is revenue and the bottom line is ...

When a business wants to calculate exactly how much revenue it earns from the sale of its products, it looks at the contribution margin ratio. The contribution margin ratio tells a company how much ...

Contribution margin is used to help measure product profitability. It helps business owners understand how sales, variable costs and fixed costs all influence operating profit. The larger the ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Eric's career includes extensive work in ...

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 ...

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 ...