Definition of Segment margin:
The measurement of how well a single department is performing as it relates to the whole operations of a business or company.
Segment margin is the amount of profit or loss produced by one component of a business. With large companies, just knowing the gross margin for the entire business is not always enough. Knowing the segment margins for each division of the company that generates both expenses and revenues provides a more accurate picture of where the company is creating the most value and where its strengths and weaknesses lie. Segment margin can also be used for understanding a company's profit for specific geographic regions.
Analyzing segment margin can be useful for determining the vulnerability of a company's overall gross margins. Also, many publicly-help companies must report the profitability of segments of their business to the Securities and Exchange Commission (SEC).
How to use Segment margin in a sentence?
- Segment margin only takes into account the segment's revenue and expenses.
- Segment margin helps to provide an accurate picture of where a company is performing well and where it's not by its strengths and weaknesses.
- Segment margin is the amount of profit or loss produced by one component of a business.
Meaning of Segment margin & Segment margin Definition