Profit margins - who is making money and how much is too much?

There's a great deal of fuss in the papers about company profit margins.  Profit is the thing you make as a reward for running a business.  It also gives you the money you need if you want to invest in new products, machinery or buildings.

How much profit is too much?  Perhaps it depends on the industry and perhaps it depends on your political views.  However, when you see figures such as Tesco making £2,188,000,000 (just over £2 Billion), remember that it depends on how this relates to their total sales - in Tesco's case it is just £3.3% or £3.30 per £100 of stuff that they sell.

Below are some examples of Operating Profit Margins.  SSE, nPower and Centrica (British Gas) are all power companies - you will recognise the rest of them.

 

SSE	2.34%
nPower	7.57%
Centrica	10.96%
Tesco	3.30%
Sainsburys	3.81%
Next	19.51%
Wetherspoons	7.14%
Vodafone	10.64%
Apple	28.67%
HSBC	27.31%