A firm’s net profit margin is a key indicator of its profitability. Analyzing it can tell potential investors whether the business may be a good bet. A company's operating margin is the profit it makes on a dollar of sales after accounting for the direct costs involved in earning the revenue.
What’s a good profit margin for your business? There’s a quick answer to this question. A good profit margin is usually 10% or higher for most businesses, though this varies significantly by industry. Profit margin conveys the relative profitability of a firm or business activity by accounting for the costs involved in producing and selling goods.
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