BKE - 15 Stocks That Hit Buffett's Profitability Hurdle
The concept of corporate earnings seems pretty straightforward. Sales are reduced by the costs of goods sold to determine a company’s gross margin and to see how profitable its product line is. From that number all other general and administrative expenses are deducted to determine the company’s operating profit (or margin) to see how efficient the enterprise it is. From there, things get a little more nuanced. And, the ultimate journey to “net income” can travel different paths.
This is why looking at net income alone doesn’t always reveal worthwhile investments. Net income may not