Skip to main content

Profit Margin Growth

Sageworks
August 9, 2011
Read Time: 0 min

So much in the economy is changing. To keep their balance and prepare for any tumult ahead, business owners should focus on profitability. “If you produce an excellent product that fills a need or provide a service that consumers depend upon, your business is more likely to outlast a potential double-dip recession. But, the real winners—those that will do more than sustain—will be the companies that can produce such a good or provide a service with a high margin. Those businesses will have capital to reinvest at the first sign of market recovery.” (Full article on Sageworks Stats.)

Sageworks analyzed which industries have been growing their profit margin over the last twelve months and should be well-situated if tax code changes or interest rate slips affect profitability. The top 5 winners include

Percentage Growth in Adjusted Net Profit before Taxes over Last 12 Months

Why have these industries been able to trim expenses to improve profitability? “Most of the industries that made the list are heavily dependent upon machinery or inventory to produce their goods or deliver their services. Unlike low-capital businesses that rely heavily on employees and their skill sets, these industries can more easily tweak their margin. For example, these industries can use equipment a little longer than expected or maintain it to prevent replacement costs. They can reduce inventories to improve holding costs. Or, like the service businesses, they can reduce their overhead through layoffs or delayed hiring despite growth. This last one seems to be a real trend among most businesses since hiring is stagnant but revenues are up across the board.”

About the Author

Sageworks

Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest

Full Bio

About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

Make Big Things Happen.

 

Looking for Banker’s Toolbox? You are in the Right Place!

Banker’s Toolbox is now Abrigo, giving you a single source for all your enterprise risk management needs. Use the login button here, or the link in the top navigation, to log in to Banker’s Toolbox Community Online.

Make yourself at home!

Looking for MainStreet Technologies? You are in the Right Place!

MainStreet Technologies is now Abrigo, giving you a single source for all your enterprise risk management needs. Use the contact us button here, or the link in the top navigation, to reach product support for your MST products.

Make yourself at home!

Looking for Sageworks? You are in the Right Place!

Sageworks is now Abrigo, giving you a single source for all your enterprise risk management needs. Use the login button here, or the link in the top navigation, to log in to your Sageworks products.

Make yourself at home!

Looking for Farin? You are in the Right Place!

Farin is now Abrigo, giving you a single source for all your enterprise risk management needs. Use the login button here, or the link in the top navigation, to log in to your Farin client portal.

Make yourself at home!

Abrigo acquires construction loan management solutions

Coupled with our lending suite, Construct and +Pay from BankLabs enable end-to-end automated residential/commercial construction loans.

Read the press announcement

BankLabs Logo Abrigo Logo