Measures the amount of revenue that exceeds variable costs and contributes to fixed costs.

What it Measures ?

How much of each sale is left after variable costs.

Relevant StakeHolders 

Finance Analyst, Product Team

In-depth Use Case / Real-world Example

Contribution Margin Analysis is calculated by subtracting variable costs from sales revenue. For example, if a company sells products worth ₹1,000,000 and has ₹600,000 in variable costs, the contribution margin is ₹400,000. This analysis helps companies assess pricing strategies and cost structure to ensure profitability.