Where next for profit margins?

clock • 4 min read

In 1912, an explosives salesman working for the large US chemicals company DuPont invented a framework to measure internal efficiency, which became famous as the DuPont analysis or formula.  This formula breaks down the important investment metric of return on equity into its constituent parts. One such constituent is net profit on sales, or net margins, which can in turn be broken down into a tax element, an interest element (if any), and an operating profit margin on sales.   Profit margins vary enormously between industries and between competitors in the same industry, depending...

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