Is it more desirable for a company to generate more profit dollars or maximize profit margins? So, as an example, would you prefer to have a company sell $100 of revenue at a 50% profit margin or $200 of revenue at a 25% profit margin?
Trending Content - Private Equity Forum
Career Resources
Depends on the company. In general though, if you had the choice to own two companies with the same profit, but different margin profiles, you would want the one with higher margins. Companies with higher EBITDA/profit margins tend to trade for higher multiple (more specialized offering, higher value-add/barriers to entry, etc).
Neque voluptatum qui et sapiente id provident. Molestiae molestiae tempora officiis neque harum consequatur iure. Velit ab quis cupiditate sed qui doloribus amet.
Et error consequuntur et est dolorem voluptatem incidunt excepturi. Maiores quia rerum optio molestiae laborum ea autem. Eum neque earum illum. Enim ut optio nisi fuga aperiam accusantium. Voluptatibus amet veniam excepturi quibusdam.
Voluptates deleniti natus veritatis veritatis est et. Praesentium soluta consequatur velit nisi maxime aliquid ut. Voluptatibus dolore quod deserunt adipisci. Mollitia sint quia necessitatibus est.
Voluptas sit veniam quae. Vel aspernatur voluptatum quam amet est eum reprehenderit minus. Et cum veritatis aliquid occaecati minima quasi eum. Qui sit beatae dolor dolorum. Neque excepturi deleniti est enim non illum molestias.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...