Definition for : Margin analysis

An analysis of a company's margins is the first step in any Financial analysis. It is a key stage because a company that does not manage to sell its products or services for more than the corresponding Production costs will ultimately go bankrupt (see Bankruptcy). Positive margins alone, however, are not sufficient on their own to create value or to escape Bankruptcy (see Value creation).

(See Chapters Chapter 9 Margin analysis: Structure and Chapter 10 Margin analysis: risks of the Vernimmen)

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