AirwaySim

General forums => General forum => Topic started by: oswegobag on March 14, 2009, 03:21:13 PM

Title: Profit Margin
Post by: oswegobag on March 14, 2009, 03:21:13 PM
In this game, what is profit margin and how is is calculated? It does not seem to make sense to me. I am making lots of $$$ and my company value is always increasing, yet I always have a negative profit margin... It does not make sense.
Title: Re: Profit Margin
Post by: Sami on March 14, 2009, 03:26:13 PM
Check wikipedia -> profit margin for example ..

It's calculated based on your last 3 month's results I believe it was.
Title: Re: Profit Margin
Post by: blair21088 on March 14, 2009, 03:34:46 PM
the reason it doesn't make sense to you is because aircraft purchases are considered expenses not assets. Sami has said that this will be chnaged in the future.
Title: Re: Profit Margin
Post by: swiftus27 on March 14, 2009, 04:01:50 PM
Actually profit margin, per se, doesn't really exist.

You have Gross Margin and you have Net Margin.

Gross Margin, in virtually every industry (outside services) is Sales - Cost of Goods Sold
Net Margin is Gross Margin - Fixed Costs, Losses, Expenses
(simplified form)