A high profit margin indicates that a company is generating a large amount of profit relative to its sales, while a low profit margin suggests that the company is less profitable.

Profit margin can be affected by a variety of factors, including the company's pricing strategy, the cost of goods and services, and the level of competition in the market. It is important to consider profit margin in the context of a company's industry and market conditions, as profit margins can vary widely across different industries and business models.