is 7 a good pretax profit margin 
that depends on the company in some sectors particularly those with higher fixed costs stiff competition and fluctuating demand a 7 pretax profit margin might be considered good in others it would hint at a lack of efficiency which could perhaps be the symptom of limited pricing power or poor management of costs the bottom linethe pretax profit margin represents the portion of a company s sales revenue that it gets to keep as a profit after subtracting all of its costs other than taxes if a company reports a 25 pretax profit margin it means that it netted 0 25 from each dollar of sales generated before paying taxes profit is the metric that companies and investors often pay the most attention to and the pretax profit margin is one of the best ways of gauging it taking tax out of the equation makes sense because these payments vary across jurisdictions fluctuate and generally offer little insight into the efficiency of companies 