fbpx

Profit margin - key figures simply explained

Profit margin is the company's profit before interest and tax (EBIT) in relation to the company's sales.
Reading time: <1 minute

TransparentShare - profit margin

Definition: profit margin

A company's earnings before interest and taxes (EBIT - Earnings Before Interests and Taxes) in relation to the company's sales. The data for the last year reported is used for the calculation.

Significance for the evaluation

The pre-tax profit margin expresses how profitable a company is. A high margin is a sign of high profitability. Inexpensive manufacturing companies can achieve higher margins more easily than companies with a high cost pool. Note: This ratio does not apply to financial stocks.

Calculation

Pre-tax profit margin in % = (EBIT / sales) * 100

Rating

+1 point: pre-tax profit margin> 12%
0 points: pre-tax profit margin between 6% and 12%
-1 point: pre-tax profit margin <6%

Example

Lufthansa (02/10/2017): pre-tax profit margin = 6.85 % -> 0 points

 

Other interesting articles:

Profit margin - key figures simply explained 1

Share post

Share on facebook
Share on twitter
Share on linkedin
Share on xing
Share on whatsapp
Share on email

The last posts

Stock split explained simply - example: Apple

Stock split explained simply - example: Apple

In a stock split, existing shares are converted into a larger number of new shares with a lower ...
NEW: S&P 500 and EURO STOXX 50 stocks

NEW: S&P 500 and EURO STOXX 50 stocks

With immediate effect, S&P 500 and EURO STOXX 50 shares are available to all premium users of ...
What is a wikifolio? Wikifolio simply explained

What is a wikifolio? Wikifolio simply explained

A wikifolio is a virtual sample portfolio in which stocks, mutual funds, ETFs and certificates are bought and ...

Simply find the cheapest depot!

Compare now without obligation and without specifying an email address and find the cheapest depot.

OnVista Bank - The new trading freedom

Test for 14 days

Ready to go in 30 seconds

* Without specifying a credit card

en_US
de_DE en_US