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How Is the Profit Margin Calculated? Discuss Its Use in Analyzing

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Essay

How is the profit margin calculated? Discuss its use in analyzing a company's performance.


Definitions:

Transaction Data

Data generated from business transactions, such as sales or purchases, often used for analysis, tracking, and reporting.

Journal

An accounting record where all business transactions are initially recorded in chronological order.

Book of Original Entry

The first place where financial transactions are recorded, including journals.

Journal Entry

A record in accounting that documents a business transaction, showing the accounts impacted and the amounts debited and credited.

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