Philip Fisher
Margins, and what the company is doing to defend them.
| Measure | Formula | Median | Middle half | Reporting it |
|---|---|---|---|---|
| Operating margin | Operating income ÷ revenue | 15.0% | 6.0% – 24.7% | 516 |
| Net margin | Net income ÷ revenue | 10.2% | 3.6% – 18.5% | 549 |
| Return on capital employed | Operating income ÷ (equity + total debt) | 10.1% | 5.6% – 16.7% | 444 |
| Operating margin, held or improving | Needs ten years of filings | — | — | — |
Where each comes from
| Operating margin | Point five asks whether the company has a worthwhile profit margin — the test of whether growth is worth having at all. |
|---|---|
| Net margin | Read against the same industry rather than across industries, which is the only comparison the number supports. |
| Return on capital employed | Point four asks whether the company has an above-average sales organisation, and point eight whether it earns enough on what it deploys to keep funding growth internally. |
| Operating margin, held or improving | Fisher's sixth point asks what a company is doing to maintain or improve its margins. This checks whether the latest is at least its own ten-year median. |
Source: Common Stocks and Uncommon Profits, the fifteen points.
What this cannot tell you
Eleven of the fifteen points are about people and process: research depth, labour relations, executive candour about setbacks. Fisher gathered them by talking to competitors and former employees, which is the opposite of what this site does.
This page describes a published method and applies its measures to filings. It is not a score, not a ranking and not a recommendation, and no page here aggregates these into a verdict. · All 11 metrics