Cost-expense margin is an important indicator used by enterprises to measure their operational efficiency. It reflects the operating results of the enterprise in a certain period of time brought about by the operating expenses. The method of calculating cost-expense margin is as follows:

Cost-expense margin = (Total profit / Total cost-expense) x 100%

Total profit is the net profit of an enterprise in a certain period, while total cost-expense includes the enterprise's cost of doing business, tax and surcharge on doing business, operating expenses, administrative expenses, financial expenses, etc. The cost-expense margin is calculated as follows.

The above information is for reference only, and we recommend that you consult a financial professional or relevant books for more comprehensive and accurate information.

In order to more accurately assess the operating efficiency of a company, we can further refine the composition of costs and expenses. For example, costs can be divided into direct material costs, direct labor costs, manufacturing costs, etc., and then calculate the profitability of these costs separately.

The role of cost and expense margin is mainly reflected in the following aspects:

Reflecting the profitability of the enterprise: the higher the cost and expense margin, the stronger the profitability of the enterprise, and vice versa, the enterprise's profitability is weaker.

Guiding enterprises to carry out cost control: by comparing the cost and expense margins of different periods, enterprises can understand their own cost control situation, so as to take targeted measures to reduce costs and expenses and improve profitability.

Evaluating the operating efficiency of an enterprise: Cost-expense margin can reflect the operating efficiency of an enterprise in a certain period of time, helping the enterprise to find out the problems in the operation and adjust the operating strategy in time.

Assisting decision-making: In investment decision-making, enterprises can judge the profitability and investment value of the target industry based on the cost-expense margin of the industry.

In short, cost and expense margin is one of the important bases for business managers to make decisions, which can help enterprises better realize their business objectives.

In summary:

The calculation method of cost-expense margin can help enterprises understand their operational efficiency and guide them to make effective cost control and resource allocation. By focusing on the changes in cost-expense margin, companies can identify and solve problems in their operations in a timely manner, thus improving profitability.

Legal basis:

The provisions of the Accounting Law of the People's Republic of China concerning cost-expense margin are as follows:

_Article 36: Enterprises shall, based on the relevant data in the financial accounting report, calculate cost-expense profit margins, return on assets and other indicators in order to assess the operating efficiency of the enterprise.

_Article 41: Enterprises shall, in accordance with state regulations, regularly submit financial and accounting reports to the relevant authorities and accept supervision and inspection.

The above content is for reference only, if necessary, it is recommended to check the relevant website.