Is your business as profitable as you want it to be?
How does your profitability stack up against other companies in your industry? Or to other businesses that are like yours?
I created the interactive dashboard shown above to give you access to profitability margins by industry. The dashboard shows profitability margins across 94 industries and for the all companies combined. There are over 7,200 companies included in the industry averages.
You can enlarge the dashboard by clicking in the bottom right corner. And you can move to each page in the dashboard by clicking near the bottom center of the report. You can also click here to see an enlarged version of the dashboard.
I encourage you to compare the profitability of your business to others from time to time. Comparing your profitability with other businesses gives you a sense for whether your business is as profitable as it should be (or could be). It can be an eye-opening experience.
Thank You Aswath Damodaran
The underlying profitability data that feeds my dashboard is provided courtesy of Aswath Damodaran. Aswath is a Professor of Finance at the Stern School of Business at New York University. He teaches the corporate finance and valuation courses in the MBA program. He makes tons of profit and business valuation information available at no cost on his website. I love his work, his books, and his commitment to sharing financial information freely.
A Fun Look at Profitability by Industry
The image below is a screenshot from the dashboard.
Mouse over a fish (in the dashboard view at the top of this post) to see the net income as a % of revenues (net margin) by industry. The bigger the fish, the bigger the net margin. It’s just a fun way to explore profitability margins by industry.
NOTE: The “Big Fish” visual works best on a computer with a mouse. If you are looking at this on your phone, just click near the bottom of the dashboard/report to go to the next page.
Overall and Industry Profit Margins
The screenshot below shows overall profitability margins and provides a drop-down menu, so you can pick a specific industry and look at their profit margins.
The top left section is overall profitability across all industries.
The bottom left section (in the dashboard view at the top of this post) has the drop-down box you can use to select a specific industry. There are almost 100 industries in the drop-down list.
The right-hand side of that page shows the net margin (net income as a % of revenues) by industry sorted by net margin.
A Treemap View of Profitability by Industry
The screenshot below shows a treemap view of profitability by Industry.
The size of each tile is determined by the net margin for that industry. The name of the industry is shown on the tile and the % shown in the bottom left corner of each tile is the net margin for that industry.
You can mouse over each tile (in the dashboard view at the top of this post) and see additional profitability margins for each industry.
Profit Margins in a Table View
The screenshot below shows profitability margins by industry in a table view.
If you click on one of the rows (industries) in the table (in the dashboard view at the top of this post) , the graph on the right side of the dashboard will display the selected profitability margins in a bar graph format for the selected industry. I find it insightful to be able to see numbers in both a table and visual format.
How Does Your Profitability Compare?
Here is an important question to ask yourself:
Is your business as profitable as you want it to be?
I encourage you to compare your profitability to the industry data in the dashboard.
Comparing your profitability with other businesses gives you a sense for whether your business is as profitable as it should be (or could be).
It is not an exact science, or a perfectly apples-to-apples comparison. But it can give you a general sense of whether now is the time to put an additional focus on driving your profitability and cash flow higher in your business.
This 5-Minute Profitability Assessment can help you too.
Philip Campbell is a CPA, financial consultant, and author of the book A Quick Start Guide to Financial Forecasting: Discover the Secret to Driving Growth, Profitability, and Cash Flow and the book Never Run Out of Cash: The 10 Cash Flow Rules You Can’t Afford to Ignore. He is also the author of a number of online courses including Understanding Your Cash Flow – In Less Than 10 Minutes. His books, articles, blog and online courses provide an easy-to-understand, step-by-step guide for entrepreneurs and business owners who want to create financial health, wealth, and freedom in business.
Philip’s 30 year career includes the acquisition or sale of 33 companies (and counting) and an IPO on the New York Stock Exchange.
This book provides a straightforward, easy-to-understand guide to one of the most powerful financial tools in business: a reliable financial forecast. It will transform the financial future of your company and help you make better, faster, smarter financial decisions.
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