This measure compares a company's net margins with those of companies in the same industry. A net margin in the first percentile indicates that a company has one of the highest profit margins in its industry. A margin in the 99th percentile would be one of the lowest.
Benefit
Shows how a company’s net margin stacks up against those of similar companies.
Origin
This is calculated in-house by arranging in ascending order, the net margin of the company relative to all other companies in the industry.
For the Pros
Net margins vary quite a bit from industry to industry; some kinds of companies generate a lot of profit for every $1 in sales (drug companies, software companies), and some don’t (commodity producers, supermarkets). By comparing companies with their peers, the net margin percentile rank helps better assess a company’s net margin.