Contribution Margin: What it is and How to Calculate it

Sophie DreierBookkeeping

This is because the contribution margin ratio indicates the extent to which your business can cover its fixed costs. Suppose Company A has the following income statement with revenue of 100,000, variable costs of 35,000, and fixed costs of 20,000. The contribution margin ratio represents a company’s revenue minus variable costs, divided by its revenue. In short, it is the … Weiterlesen