PLAIN-LANGUAGE DEFINITION
The amount each unit sold contributes toward covering fixed costs and generating profit, after variable costs are deducted. Formula: Unit Price − Variable Cost per Unit. When contribution margin is zero, break-even cannot be calculated.
What to check
Compare the value against the same period last year and check which costs it includes.
Where this connects to Impresa
You may encounter this concept when reviewing Financial Health. Start with the underlying inputs and check the applicable reporting period before interpreting the result.
Read the Financial Health guideA NOTE ON INTERPRETATION
NEXT DEFINITIONBalance Sheet ↗Definitions here explain the concept. Accounting treatments, formulas, and industry comparisons may vary. Use your own records and qualified advice for material decisions.