Know your metric
Importance of
Average Profit Margin
Profitability Measure
Reflects the overall profitability of the company.
Benchmarking Tool
Allows comparison with industry standards.
Financial Health
Signifies financial health and operational efficiency.
Drawbacks of
Average Profit Margin
Does Not Account for Costs
Ignores variation in cost structures.
Variability
Affected by changes in sales or costs.
Misinterpretation
Can be misinterpreted without context.
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