2

I was looking at fundamentals for SalesForce (CRM) and noticed that their profit margin higher than operating margin:

Profitability
Profit Margin 1.48%
Operating Margin (ttm) 0.21%

In my understanding margins should go from higher to lower in this order:

  1. Gross profit margin
  2. Operating margin
  3. Profit margin

Could anybody explain how is it possible for operating margin be higher than profit margin?

3

Looking at the financials on the same site, https://finance.yahoo.com/quote/CRM/financials?p=CRM:

Operating income was $64MM. Then other income was $50MM and Tax expense was $-154MM (that is income expense is adding to income), less interest expense of $89MM. For a net imcome of $180MM.

Net income of $180MM is greater than operating income of $64MM, so profit margin will be greater than operating margin.

The stinky pile of poo is such a large negative income tax expense. That will not be sustainable and deserves scrutiny.

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