Where next for profit margins?

This formula breaks down the important investment metric of return on equity into its constituent parts. One such constituent is net profit on sales, or net margins, which can in turn be broken down into a tax element, an interest element (if any), and an operating profit margin on sales.   Profit margins vary enormously between industries and between competitors in the same industry, depending on their pricing power, efficiency, scale and sales strategy. In the past year, which has seen strong inflation in raw materials, energy, freight and labour costs, corporate margins have bee...