Companies that have historically generated profit margins and produced attractive returns on investments, relative to the market and/or their sector. The Profitability factor comprises the following sub-factors:
Operating Margin (TTM)
- This value measures the percent of revenues remaining after paying all operating expenses. It is calculated as the trailing 12 months Operating Income divided by the trailing 12 months Total Revenue, multiplied by 100. Operating Income is defined as Total Revenue minus Total Operating Expenses.
Net Profit Margin (TTM)
- Also known as Return on Sales, this value is the Income After Taxes for the trailing twelve months divided by Total Revenue for the same period, expressed as a percentage.
Please Note: Most Banks and Finance companies do not report revenues when they announce their preliminary quarterly financial results in the press. When this happens, the trailing twelve month value will not be available (NA).
Return on Average Equity (TTM)
- This value is the Income Available to Common Stockholders for the trailing twelve months divided by the Average Common Equity, expressed as a percentage. Average Common Equity is calculated by adding the Common Equity for the 5 most recent quarters and dividing by 5.
Return on Investment (TTM)
- This value is the trailing twelve month Income After Taxes divided by the average Total Long Term Debt, Other Long Term Liabilities and Shareholders Equity, expressed as a percentage.