Portions of this article were drafted using an in-house natural language generation platform. The article was reviewed, fact-checked and edited by our editorial staff. Contribution margin is used to ...

To run a company successfully, you need to know everything about your business, including its financials. One of the most critical financial metrics to grasp is the contribution margin, which can help ...

Both metrics assess a company's profitability, but in different ways Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor.

The concept of a contribution margin comes from the need for business managers to understand how profitable their businesses have become. For most managers, this is as simple as looking at something ...