Although there is no magic number, a good profit margin will normally range between 5% and 10%. Below, we have compiled the net profit margins of common companies. This example illustrates the importance of having strong gross and operating profit margins. Weakness at these levels indicates that money is being lost in basic operations, leaving little income to pay the debt and pay taxes.
The healthy gross and operating profit margins in the previous example allowed Starbucks to maintain decent profits while meeting all its other financial obligations.
