Cluenex
Log inStart free
Glossary · Business quality

Profitability

How much of each sales dollar the company keeps as profit.

Why it matters

High margins mean pricing power and room for mistakes. Thin margins mean small cost increases can wipe out profit.

How to read it

Look at operating margin and free cash flow margin, and compare with peers.

Related

Operating marginProfit from running the business, before interest and tax, as a share of sales.Free cash flowCash from operations minus what the company spends on equipment and buildings.Gross marginSales minus the direct cost of making the product, as a share of sales.

In the Cluenex app, this explanation opens next to every profitability figure, with the live reading for the stock you are looking at. Open it in Cluenex