Analyzing changes in magnitude and direction of profit margin shows interesting behavioral trends for individual firms. These factors appear unrelated.
June 11, 2019 at 09:16 PM
1 minute read
In the previous three articles, we analyzed profit margin (defined as operating income divided by revenue) trends in the AmLaw 100. Here we will analyze behavior at one level below, that is, at the individual firm. Specifically, we examine both magnitude and direction of profit margin changes from one year to the next. We also dig into the relationship between profit margin and differential in rates of growth in RPL and CPL.
Profit Margin and Growth Rates in RPL and CPL
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