Discover how to calculate contribution margin, a key profitability metric, by subtracting variable costs from sales revenue.

The concept of a contribution margin comes from the need for business managers to understand how profitable their businesses have become. For most managers, this is as simple as looking at something ...

For a business that makes products, a contribution margin helps you determine how much you'll need to make and sell to cover all your costs and begin to realize a profit. It's a basic metric used by ...

When you run a company, it’s obviously important to understand how profitable the business is. Many leaders look at profit margin, which measures the total amount by which revenue from sales exceeds ...

Forbes contributors publish independent expert analyses and insights. I am the Kester and Brynes Professor at Columbia Business School and a Chazen Senior Scholar at the Jerome A. Chazen Institute for ...