Musings on Markets: Profitability Analysis Across Global Markets and Industries

This analysis examines corporate profitability across multiple dimensions—gross, operating, and net margins; returns on equity and invested capital; and excess returns relative to cost of capital—for 47,606 publicly traded firms globally from 2017-2021. The author demonstrates that despite lower interest rates, most firms (57%) earn returns below their cost of capital, and profitability follows a corporate life cycle pattern, with particular emphasis on how disruption creates losers without necessarily creating winners.