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Based on an analysis of the financial statements of privately held companies, Sageworks, a financial information company, ranked all industries by net profit margin over the last 12 months and found that accounting services topped the list, with a net profit margin averaging 19.8 percent in the 12 months ended July 2014. The other industries in the top five are legal services, oil and gas extraction, equipment rental and leasing and offices of dentists. Seven of the top fifteen industries are related to health care or real estate. Net profit margin has been adjusted to exclude taxes and include owner compensation in excess of their market-rate salaries.
“Many of these industries are consistently at the top of the list because they are profitable by their very nature,” explained Sageworks analyst Jenna Weaver. She points out that service-based businesses can attain strong profit margins based on their ability to keep costs low, while being able to charge a premium for their specialized services. “These kinds of businesses sell services from bookkeeping to legal advice to health care and do not need to purchase as many, if any, physical goods,” Weaver said.
- Accounting, Tax Preparation, Bookkeeping, and Payroll Services
- Legal Services
- Oil and Gas Extraction
- Commercial and Industrial Machinery and Equipment Rental and Leasing
- Offices of Dentists
- Lessors of Real Estate
- Offices of Physicians
- Offices of Real Estate Agents and Brokers
- Offices of Other Health Practitioners
- Management of Companies and Enterprises
- Outpatient Care Centers
- Other Schools and Instruction
- Activities Related to Real Estate
- Death Care Services
- Support Activities for Mining
Sageworks is a financial information company and the leader in the analysis of privately held companies. The company provides risk-management solutions to financial institutions and financial analysis and benchmarking applications to accounting firms and private companies. Sageworks data and applications are used by thousands of accounting firms and financial institutions across North America and internationally.