Let’s say you own a bakery and you make some of the best wedding cakes in town. You kept really good records and, after doing the math, came up with a net profit margin of 21%. But your friend owns an IT company that installs complicated computer networks for businesses and has a ...
For example, the cost of goods sold for an artisan bakery has very different expenses than a manufacturing plant that produces large-scale steel valves for the petroleum sector. Using profit margin ratios to compare companies is best done when looking at businesses within the same industry or ...
Because what matters more is the degree of profitability. For example, in an industry whose average profitability is 6%, a company operates at 15% levels. It is better than a 20% margin company, with an industry average of 18%. A high degree of profitability is symbolic of the company’s...
and an ample operating margin is required to conduct business in all types of economies. Retail sales of general merchandise in a drugstore are more susceptible to economic downturns than prescription drug sales are. Proper inventory management is crucial, especially for prescription drug inventories, ...
Operating profit (ebit) ben- efited from the favorable impact of our focus on higher-margin products as well as tight cost control, and rose by 6.7% to chf 296.2 million (or +14.6% in local currencies). Western Europe – Recovery in all businesses in the second semester after a low in...