Finance / July 27, 2018 / Emmalynn Leach
Lower EBIT Margins indicate lower profitability from a company. When comparing against its competitors, investors can determine if lower EBIT margins are due to the competitive landscape (where all companies are having lower margins) or a issue just within the company (where the company is facing lower sales and higher costs).
For some businesses, like restaurants and some retailers, cash is really cash - currency and paper money. The business takes cash from customers and sometimes pays its bills in cash. Cash businesses have a special issue with keeping track of cash flow, especially since they may not track income unless there are invoices or other paperwork.
Both of these measurements are key concepts for management in any industry. Retailers can use it to see how much product they must sell to meet their minimum costs. Manufacturers can calculate the amount of product that must be produced and sold during a period.
While cumulative interest is one method of calculating how well a bond investment is performing, the following are more comprehensive yield methods: nominal yield, current yield, effective annual yield, and yield to maturity.
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