Friday, July 03, 2009

Industry Profitable Rankings

I am always quite fascinated by how profitable different industries can be. Fortune 500 publishes a list of the most profitable indsutries in the US every year. Profitability I am refering to is the industry's profits as % of their revenue.

Here is a comparison of the 2009 and 2008 lists.

What fascinates me is the huge increase in profitability in Internet Services and Retailing from 7% in 2007 to 19.4% in 2008. Logically this shouldn't be right since one can imagine competition within this industry has increased substantially. One more thing this list shows is the decrease in overall profitability (start of credit crunch and thus recession?).

What else can you spot from the list?


Observer said...

I think one of the key aspects of examing it would need to see where has the cost been. Secondly, whether there's revenue growth.

Because if revenue has been stagnate but cost cutting measures are in place, the ratios could be highly misleading

Boss Lepton said...

There are several other measures as well and profitability ratios are known to be highly misleading on itself.

I think my point here is just to see it as an economy wide comparison to see which industry looks more attractive compared to another.