Segment Margin Calculator

✖Segment Profit refers to the profit generated by a specific operating segment of a company.ⓘ Segment Profit [SP]			+10% -10%
✖Segment Revenue refers to the total sales or revenue generated by a specific operating segment within a company.ⓘ Segment Revenue [SR]			+10% -10%

✖Segment Margin refers to the profitability of a specific operating segment within a company.ⓘ Segment Margin [SM]

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Formula

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Segment Margin

Formula

SM = \frac{SP}{SR}

Example

0.588235 = \frac{100}{170}

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Segment Margin Solution

STEP 0: Pre-Calculation Summary

Formula Used

Segment Margin = Segment Profit/Segment Revenue
SM = SP/SR
This formula uses 3 Variables

Variables Used

Segment Margin - Segment Margin refers to the profitability of a specific operating segment within a company.
Segment Profit - Segment Profit refers to the profit generated by a specific operating segment of a company.
Segment Revenue - Segment Revenue refers to the total sales or revenue generated by a specific operating segment within a company.

STEP 1: Convert Input(s) to Base Unit

Segment Profit: 100 --> No Conversion Required
Segment Revenue: 170 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

SM = SP/SR --> 100/170

Evaluating ... ...

SM = 0.588235294117647

STEP 3: Convert Result to Output's Unit

0.588235294117647 --> No Conversion Required

FINAL ANSWER

0.588235294117647 ≈ 0.588235 <-- Segment Margin

(Calculation completed in 00.004 seconds)

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Created by Aashna

IGNOU (IGNOU), India

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Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

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< 5 Financial Modeling and Valuation Calculators

Return on Common Equity

Go Return on Common Equity = (Net Income-Preferred Dividends)/Average Common Equity

Segment Debt Ratio

Go Segment Debt Ratio = Segment Liabilities/Segment Assets

Segment Turnover

Go Segment Turnover = Segment Revenue/Segment Assets

Segment Margin

Go Segment Margin = Segment Profit/Segment Revenue

Segment Roa

Go Segment Roa = Segment Profit/Segment Assets

Segment Margin Formula

Segment Margin = Segment Profit/Segment Revenue
SM = SP/SR

What is Segment Margin ?

Segment Margin is a crucial financial metric used to evaluate the profitability and financial performance of individual business units or divisions within an organization. Segment margin is the ratio of segment profit to segment revenue, expressed as a percentage. It represents the portion of segment revenue that contributes to the segment's operating profit or income after covering all segment-specific expenses. A higher segment margin indicates greater profitability and efficiency in generating profit from segment revenue.
Conversely, a lower segment margin suggests lower profitability relative to segment revenue, which may require further analysis to identify areas for improvement. Comparing segment margins across business units or over time helps evaluate the relative performance and efficiency of different segments within the organization. It assists management in identifying segments with strong profitability that may warrant additional investment or those with low profitability.

How to Calculate Segment Margin?

Segment Margin calculator uses Segment Margin = Segment Profit/Segment Revenue to calculate the Segment Margin, Segment Margin measures the proportion of segment revenue that remains as profit after deducting all segment-specific expenses. Segment Margin is denoted by SM symbol.

How to calculate Segment Margin using this online calculator? To use this online calculator for Segment Margin, enter Segment Profit (SP) & Segment Revenue (SR) and hit the calculate button. Here is how the Segment Margin calculation can be explained with given input values -> 0.588235 = 100/170.

FAQ

What is Segment Margin?

Segment Margin measures the proportion of segment revenue that remains as profit after deducting all segment-specific expenses and is represented as SM = SP/SR or Segment Margin = Segment Profit/Segment Revenue. Segment Profit refers to the profit generated by a specific operating segment of a company & Segment Revenue refers to the total sales or revenue generated by a specific operating segment within a company.

How to calculate Segment Margin?

Segment Margin measures the proportion of segment revenue that remains as profit after deducting all segment-specific expenses is calculated using Segment Margin = Segment Profit/Segment Revenue. To calculate Segment Margin, you need Segment Profit (SP) & Segment Revenue (SR). With our tool, you need to enter the respective value for Segment Profit & Segment Revenue and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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