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Analyzing Margins

While gross margins can be useful for detecting deterioration in a company's competitive position, and profit margins are a key ingredient in the target price calculation, I've found operating margins the most useful of the three measures for evaluating a company's profitability trends.

Table 11-11. Black Box Corporation's operating margin.
PeriodQ 3/00Q 3/99FY 3/00FY 3/99FY 3/98FY 3/97
Operating margin15.8%20.5%16%19%19%19%



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