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It is the difference between production cost and the sale price of a good or service (without taxes). It is also known as profit margin because it is the profit made from a transaction. In finance, margin can be the difference (excess) of the value of loan´s collateral over the value of the loan.
Depending on the costs allocated on its calculus, there are two types of margins: gross and net margin. gross margin is the net sales minus the costs associated with the production of the goods or services. It represents how much money is actually made after sales. net margin represents how much income a company earns after paying fixed overhead costs and taxes. It is normally used to compare a company´s profits with others from its same industry.