What does CM3 and CM4 mean in profitability?

Answer 1

CM3 and CM4 refer to specific metrics used in profitability analysis, particularly in the context of contribution margins. CM3 represents the contribution margin after accounting for variable costs related to production, while CM4 includes additional variable costs such as sales and marketing expenses. These metrics help businesses assess the profitability of their products or services by revealing how much revenue is available to cover fixed costs and generate profit after accounting for varying costs. Understanding CM3 and CM4 allows companies to make informed decisions about pricing, cost management, and resource allocation.