For 46% entrepreneurs profit margins are much less than normal, as sales levels go down

Profit margins

By A Representative
The Indian Institute of Management-Ahmedabad’s (IIM-A’s) latest Business Inflation Expectations Survey, based on responses of over 1600 companies, has found that one year ahead business inflation expectation, “as estimated from the mean of individual probability distribution of unit cost increase, in November 2018 has increased to 3.86% from 3.66% observed in October 2018.”
“Uncertainty of business inflation expectation in November 2018, as captured by the square root of the average variance of the individual probability distribution of unit cost increase, has increased further to 2.24%”, the IIM-A report states.
Regarding cost perceptions, the report says, “Around 60% of the firms in November 2018 reported that increase in costs has been more than 3% (marginally up from around 58% in October 2018) during the last one year. The proportion of firms perceiving significant cost increase has remained same at 34% in November 2018.”

Sales levels

Then, the report says, “Nearly 3/5th of the firms in the sample reported that sales are ‘somewhat or much less than normal’ in November 2018. This proportion has increased during the last two months”, adding, “Responses of 46% of the firms in the sample in November 2018 indicate ‘much less than normal’ profit margins. Proportion of firms reporting ‘normal or above normal’ profit has remained unchanged at around 30% for the last 5 months.”

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