The Contribution Margin
Contribution margin is revenue less any variable costs such as sales commissions. Since variable costs rise and fall at the same rate as revenue, the more revenue earned the more the associated costs. All non-variable expenses will have to be paid from what is left, the contribution margin.
For more information, see all articles on: Common Size Analysis, Financial Statement Analysis, Fundamental Analysis, Ratio Analysis See also:
The Intelligent Investor: The Classic Text on Value Investing
Financial Statement Analysis: A Practitioner's Guide, 3rd Edition
Managing Investment Portfolios: A Dynamic Process (CFA Institute Investment Series)
