Contribution Margin Ratio

Ratio of contribution margin to sales revenue [1]
The closer a contribution margin percent, or ratio, is to 100%, the better. The higher the ratio, the more money is available to cover the business’s overhead expenses, or fixed costs. However, it’s more likely that the contribution margin ratio is well below 100%, and probably below 50% [2]


[2] Shopify. Retrieved May 21, 2021, from

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