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How to Calculate Income as a Percentage of Revenue

By Motley Fool Staff – Updated Apr 29, 2025 at 11:15 PM

Key Points

  • Investing in high-profit companies is advised as stocks are tied to future earnings.
  • Profitability, measured by net income/revenue, aids in assessing and comparing firms.
  • A declining profit margin, like Acme's drop from 22% to 15%, signals potential issues.
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