1. gross profit margin
The calculation is to divide the company's gross profit by its total revenue. A company's gross profit is equal to its total revenue minus cost of sale (COGS), which includes expenses such as material costs, manufacturing costs, and wages paid to workers.
Generally speaking, companies with gross margins above the industry average tend to have a competitive advantage over their peers and may attract investors' attention.
2. Net profit margin
The calculation method is to divide the company's net revenue by its total revenue. It is a key indicator of a company's profitability and also helps assess the company's overall competitiveness. Companies with higher than average net profit margins tend to have a greater margin of safety during economic downturns.
3. Return on assets (ROA)
ROA is an overall profitability measure calculated by dividing net income by average total assets. It measures how efficiently a company uses all of its assets to generate profits. An industry comparison is needed because different industries have different ROA. Generally, companies with an ROA above 10% are likely to be considered good performers.
4. Return on equity (ROE)
ROE is a key profit indicator that most shareholders pay close attention to, and is the ratio of net income to average shareholder equity. It measures how effectively a company uses its net assets to generate profits, and reflects its net profit margin, ROA, and financial leverage. A company or industry with a high ROE (usually over 20%) may indicate that it has a strong competitive advantage and may seem attractive...

1. Gross Profit Margin
It is calculated by dividing a company's gross profit by its total revenue. A company's gross profit equals its total revenue minus the cost of goods sold (COGS), which includes expenses such as material costs, manufacturing costs, and wages paid to workers.
Generally, a company with a gross profit margin higher than the industry average tends to have competitive advantages over its peers and might attract investors' attention.
2. Net Profit Margin
It is calculated ...

5️⃣

Barron's senior writer and member of the stock-picking team, Nicholas Jasinski, has compiled a new list of the "Magnificent 7" based on various criteria such as portfolio diversification, fundamentals, and valuation.
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