Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited.

If you buy something and sell it later on the same day, how do you calculate 'investment'?
Another way to look at this is if we separate the owner's account from the business's account.  At the start of the year, the owner puts $9 into the business account to get the business started. At the end of the first day, the business account has $10, and at the end of the second day, the business account has $11.  The owner doesn't need to add any more of his own money into the business account. At the end of the 365th day, the business will have $374, which is $365 profit + $9 investment.  Assuming the business has no other expenses, the business will calculate profit for the year like this: The author is making a strange point. The two numbers he is talking about are two different quantities. The business owner's return on investment is $365 / $9 = 4056%.  But the business's profit margin is $365 / $3650 = 10%.  Both are useful numbers when running the business. I disagree with the author's insinuation that a business is doing something tricky when calculating profit margin. Remember that, in addition to the business owner's monetary investment, he worked every day for a year to earn that $365.