Segment Margin Calculator

Calculate Segment Margin



Formula

The formula for calculating the Segment Margin is:

\[ SEM = \frac{SR - SC}{SR} \times 100 \]

Where:

What is Segment Margin?

Segment Margin is a financial metric used to assess the profitability of a specific segment within a company. It is calculated by subtracting the total segment costs from the total segment revenue, dividing the result by the total segment revenue, and then multiplying by 100 to get a percentage. This metric helps in understanding the contribution of each segment to the overall profitability of the company.

Example Calculation

Let's assume the following values:

Using the formula to calculate the Segment Margin:

\[ SEM = \frac{100000 - 60000}{100000} \times 100 = \frac{40000}{100000} \times 100 = 40\% \]

The Segment Margin is 40%.