Formulas to
calculate contribution margin and contribution margin
ratio:
Contribution Margin = sales -
variable costs.
Contribution Margin Ratio =
(sales - variable costs)/sales.
Contribution
margin and contribution margin ratio definition and
explanation:
Contribution margin is the amount generated by sales
to cover fixed costs.
The contribution margin ratio indicates the percent
of sales available to cover fixed costs and profits.
The contribution margin and contribution margin
ratio
are included in the financial statement ratio
analysis spreadsheets highlighted in the left column,
which provide formulas, definitions, calculation, charts
and explanations of each ratio.
The contribution margin ratio is listed in our profitability
ratios.
The contribution
margin ratio and other ratios are key
to understanding financial statements. Our
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Spreadsheets to
calculate ratios (includes formulas, definitions,
explanations and charts):
See list
of ratios , or the financial statement ratio
analysis spreadsheets which are not highlighted in the
left column, to see which other ratios our spreadsheets
calculate, define and explain.
The contribution margin
ratio may be included in our
custom 1, 3 or 5 period financial
statement ratio analysis spreadsheet.
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