The Circles of Profitabilities & Profit Margins Comparison
The underlying concept in the Message A, extracted from the Linked Article, is perhaps the utmost unperceived knowledge in investing.
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A.
ROE (% to net worth) can also be compared with any company in any line of business, i.e. Inter-Cross-industries.
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Whereas Profit Margin (% to sales, i.e. GPM, NPM) can only be compared with companies in the same line of business, i.e. Intra-industry.
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In short:
The circle of Profitabilities Comparison could be Inter-Cross-Industries.
The circle of Profit Margins Comparison is only within Intra-Industry, same industry.
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B.
The Investment on Marketable Securities in Balance Sheet is recorded at the Cost, not the market value.
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Link Article :