Can someone pls explain how do we use this measure to check quality of earnings? I don't remember but there's something about misclassification here.
Thanks作者: mengxu 时间: 2011-7-13 16:14
It's just (Sales-COGs-SGA)/Sales
Basically the formula just shows the basics of the business. There are no non-cash items, non-recurring items, etc.... so the ratio provides the "core" margin.
