Quote:
Originally posted by Superman
Yes, net margins = profits. Net margins is profit as a percent of business volume.
Simple example: Company starts with $3 in equity. Borrows another $3. That's debt. Company buys two gallons of gas, and resells them making 10% profit. That's $0.60 profit. Return on investment is 20%......if the company only does this once in a year. Let's say this company does this five times. Business volume is now $31, and net profit is $3. Net profit has remained at 10%, but profits as a percentage of investment (return on investment) is 100%.
That'd purdy good.
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ROI??? Based in relation to opening equity?? In a mature company, what's the point?