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Jul 14, 2016 |
Financial Ratios,  |
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EBIT - Operating profit Margin

formula3

The EBIT Margin measures the profitability of sales, indicating how much sales revenue turns into operating profits. This index is significantly affected by the specific characteristics of the sector. For example, the big retailers (supermarkets, hypermarkets, etc.) will have a relatively low EBIT Margin, because their high sales volume is not capable of generating much revenue. In contrast, business activities based on high mark-ups on products will have a higher EBIT Margin, as lower sales volume is accompanied by significant profitability. This is the case of crafts and some businesses like clothing stores. Also for the EBIT Margin is always useful compare this ratio with that of the sector of our company. 

 

table ebit