Profit margins tell you about a company's ability to manage its costs, and about its pricing strategy.
Regarding pricing, certain industries (jewelry) sell their products at a significant markup whereas other industries (grocery stores) mark up their products very little (they rely instead on high sales volume to generate profits).
Regarding cost management:
(1) the gross margin tells you about the company's ability to manage its cost of goods sold
(2) the operating margin tells you about the company's ability to manage its operating costs, such as SG&A expense
(3) the profit margin tells you about the company's ability to manage all of its expenses
You can also calculate an EBIT margin (EBIT / sales), an EBITDA margin (EBITDA / sales), and an EBT margin (EBT / sales).
Note that each margin is a different measure of profit divided by sales. The margin percentage tells you the percentage of each sales dollar that ultimately becomes profit.
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