Newsletter Login

Username:

Password:


Need help logging in?

New Subscriber?
Start Here!

Real Questions from Real Subscribers


Q: What is the difference between gross profit margin and operating profit margin?

A: Dear Subscriber,

In general, gross profit margin reflects the percentage of revenue left over after the cost of producing goods or services. Operating margin reflects the percentage of revenue left over after not just producing, but also selling the goods and services and paying other operating expenses.

Of course, not all firms report their results the same way, so the numbers don’t always compare cleanly from company to company. Occasionally you'll find a company that lumps everything together, so gross and operating margins are the same.

However, if you think of gross margin as what's left after production costs and operating margin as what's left after operating costs, you'll have a good idea how to interpret those numbers for most companies.

Thanks for your interest,

Bob Sweet, CFA
Managing Editor, Dow Theory Forecasts

More Investment Newsletters and Services

Drip Investor

DRIP Investor — how you can buy dividend-paying stocks without a broker.

Visit us at DRIP Investor, your source for dividend reinvestment plans.

Lazy Investor

The Lazy Investor — free weekly e-letter that delivers market updates and stock market information via email.

Visit us at The Lazy Investor, our free investment newsletter.

Horizon Investment

Horizon — registered investment advisor seeks to provide investors at all stages the ability to build, preserve and enjoy wealth.

Visit us at Horizon Investment Services to get started in an investment program that's right for you.

Upside

Upside — discovers today's small and midcap stocks poised to be tomorrow's Blue Chip leaders.

Visit us at Upside, your guide to the best buys in small and midcap stocks.

Current Hotline

Friday, December 2, 2016

U.S. stocks have moved lower this week despite mostly solid economic data

Read More from the Hotline

Stock Spotlight

Floor supplier has high ceiling

Wednesday, November 30, 2016

In the weeks leading up to Mohawk Industries' ($200; MHK) September-quarter report, investors braced for the worst. Shares of Mohawk, a maker of flooring products, had slumped since...

Read More from Stock Spotlight

Individual Stock Reports

ISRs make stock research easy!

Perhaps the most valuable two page reports available anywhere.

All the data you would normally have to plow through years of 10-K filings, earnings reports, and reams of market data to assemble — yours all in one concise report.

ISRs contain our proprietary Quadrix scores — find out how we rate all the stocks in the S&P 500.

Visit us at individualstockreports.com