Contribution Margin Vs Operating Margin: What Are the Differences?

Contribution margin and operating margins are both profitability measures. However, both these metrics provide different types of information to the business. Both these terms have certain similarities and some key differences. Let us discuss these concepts briefly. What is Contribution Margin? The contribution margin is total sales minus variable costs for a company. It can …

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What is a Throughput Contract? Throughput Contract Vs Take-or-Pay Contract

Throughput contracts allow two or more parties to set forth terms and conditions for the purchase of commodities and goods for long-term projects. These contracts set the conditions for the minimum order quantity, shipping schedule, and duration of the contract for scheduled deliveries until the contract expires. Let us discuss what is a throughput contract, …

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Franchising Vs Licensing – What are the Key Differences?

Franchising and licensing are two popular business models. Both models offer certain advantages and disadvantages to both parties in the arrangement. Let us discuss what are franchising and licensing and their key differences. What is Franchising? Franchising refers to a business agreement between a franchisor and a franchisee where the franchisor remains the legal owner …

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