Under normal circumstances, the higher the gross profit margin of listed companies means the stronger the profitability of listed companies. On the contrary, the lower the gross profit margin of listed companies means the weaker the profitability of listed companies.
1 has different meanings. Gross profit margin is the ratio of the company's total income after deducting the direct cost of products (excluding other costs such as three fees and income tax), so it is called gross profit margin. The net interest rate is also growing for a long time, the higher the better. If the net profit grows faster than the income, the net interest rate will increase, indicating that the company's profitability is increasing, on the contrary, indicating that the company's profitability may be declining.
2. The calculation method is different. Net interest rate = (net profit ÷ operating income) ×100%; Gross profit margin = (operating income-operating cost)/operating income × 100%
3. Different meanings. High gross profit margin means that the company's products are highly competitive in the market, which means that consumers are willing to pay higher prices than similar products to buy the company's products. Or the direct cost of producing products on behalf of enterprises is very low. Specifically, high gross profit margin has two major advantages. First, under normal circumstances, the same sales revenue makes more money.