EBAY i jus WON this ITEM!IS IT LEGIT!?
Answers: it means that they are making smaller amount money on the goods they are selling than they be before - for instance
finishing year the cost of materials to produce the products sold was
45% of sale - this year the cost of materials has risen to 48% of sale - and you've made no other adjustments to compensate for this - such as raise price or cutting overhead -
you're margins enjoy just be squeezed! doesn't feel suitable does it?
Is the U.S. head for a recession if grease keep rising?
Margin=Income/Sales.
If the margin is squeezing, it's any:
1. income is shrinking (with sales stay the same);
2. Sales is increasing (with income stays the same)
3. Both are shrinking.
In overnight case 1, income shrinks could be caused by lowered price, increased expenses, etc
In crust 2, sales is increasing, and thus expense could increase at indistinguishable time. And that could be the reason why income is staying at like level.
Hope this help.
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