Internet and catalog retailers, in contrast, can and do get by with below-average EBIT and EBITDA margins precisely because they employ less capital than the average company.
They pore over lots of them gross margin, operating margin, cash margin, EBIT and EBITDA margins, and on and on for clues about future profitability and shifting competitive positions.
Above, the average forecast of Trefis members for mobile phones EBIT margin for emerging markets indicates that margins will stay flat at around 12.5%, compared to the baseline Trefis estimate of a decrease from 10.5% in 2010 to 7.5% during the same period.
The analysts expect lower material costs and an appreciating Euro could help raise 2012 and 2013 EBIT (earnings before interest and tax) margins to a five-year high of 6.7%, rising to 9.7% by 2015 with increased sales growth.