Elizabeth MacDonald

Elizabeth MacDonald

Elizabeth MacDonald

Prior to joining FBN, MacDonald was a senior editor at Forbes Magazine, where she covered stock market and earnings news and created "The World's 100 Most Powerful Women" annual list. She was also a regular guest on the FOX News Channel (FNC), appearing on "Forbes on Fox,"  "Your World with Neil Cavuto" and "The O'Reilly Factor."

Before Forbes, MacDonald covered stock market, earnings and accounting abuses for The Wall Street Journal's Money & Investing section, with front page stories and Heard on the Street columns. MacDonald was one of the first journalists in the country to sound the alarm about the coming wave of accounting scandals in the mid-nineties, and also broke stories on, for example, Scientology's secret settlement with the IRS and the Kennedys' use of the IRS to target political enemies.

Prior to that, MacDonald was a financial editor for Worth magazine and covered the IRS and taxes for Money magazine. Members of Congress have noted an award-winning investigative series MacDonald reported on IRS abuses led to improved taxpayer rights and reforms at the agency. MacDonald was also called in to testify before Congress about IRS abuses.

Recognized as one of the top prize-winning business journalists in the country, MacDonald has received 14 awards, including the top prize in business journalism, the Gerald Loeb Award for Distinguished Business Journalism (and won a nomination in an ensuing year); the Society of Professional Journalists' Award for Outstanding Public Service reporting; and the Newswomen's Club of New York Front Page Award for Excellence in Investigative Journalism.

MacDonald is a native of Rockville Centre, New York.

 

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Profit Margin

Ever been to a clearance sale at a department store and wonder how a massive store like Macy's or Saks can have 50%, 60%, or even 75%-off sales and still remain in business? Ever wonder why that piece of cloth that an Italian designer calls a dress can be worth $2,400, and how much it really costs to make and sell?

Ladies and gentlemen, let's talk profit margin. Profit margin is the difference between how much it costs a company to manufacture, transport and sell its products, and how much it sells them for. If a company made $10 million in profit of sales of $100 million, the profit margin is 10%. You get that number by dividing the profit ($10 million) by the income ($100 million). Usually you'll hear profit margin as a percentage.

The profit margin is a great way to tell how well a company is run. If you have a high profit margin in a company, that means that the company's costs to make the product are low and it can withstand changes in price fairly well. Also you can use profit margin to tell how well a company is run when you look at similar companies.

Let's say you were looking a two candy companies. One has a profit margin of 15%, off $200 million in sales. The other company has a profit margin of 7% off $400 million in sales. The $400 million candy company's profit margin shows the company is having trouble keeping costs down. It might be spending too much money on their CEO's private jet, or their sugar suppliers aren't as good as they could be. Anyway, if investors were looking at the $400 million candy company, they would be asking some serious questions.