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I wouldn’t say it’s misleading, it’s still a very important financial metric. You just have to be aware of its limitations
by financetechbro 2y ago
I wouldn’t say it’s misleading, it’s still a very important financial metric. You just have to be aware of its limitations
- Closi 2y agoI would say it's misleading when it's in a paragraph which is broadly implying that a high gross profit % is a sign of profiteering. See the actual paragraph where the article compares the gross margin of SaaS against the NET margin of Visa/Mastercard. > Some SaaS companies achieve gross profit margins of 75 to 90 percent, rivaling Windows in its monopolistic heyday. Even the reigning credit-card duopoly of Visa and Mastercard wield a mere 51 percent net margin. I don't see how anyone can say the above statement or comparison isn't a bit misleading, as the Gross Margin of Visa and Mastercard will be closer to 100% than to 50%. In reality it's unsurprising that software looks really profitable when you remove all the costs of developing the software.
- rdslw 2y agoIn this article using it is very MISLEADING, exactly as Closi writes above. Exercise: compare net profit of Visa/Master card to net profit of those "highly profitable" saas marvels. Exercise two: compare gross profits of them. Result: whole paragraph turns not being true while not aligned with the article opinion and showing actually opposite :-D p.s. I do agree with the overall article :)