Finance / August 5, 2018 / Alicia Franklin
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).
Fixed costs are those costs incurred by a company which are unrelated to fluctuations in productivity or sales. Examples of fixed costs include insurance premiums and leases on property. Fixed costs should not be confused with variable costs, which do fluctuate in direct proportion to productivity levels.
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.
In a company, debt finance can take a number of forms. For example, money can be borrowed from a bank as a term loan, or money can be borrowed from investors, in the form of debentures.
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