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BW Businessworld

Getting Real On Profits

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The growth in sales and profits of companies has been out of sync in most of the past five quarters. Net sales have struggled to pick up in the past three quarters, indicating a slackening of demand in the real economy. However, by cutting cost, firms have managed to grow their operating profits.

Except for the latest quarter, net sales growth hasn't kept pace with operating profits. When sales pick up, firms will not be able to rein in cost cutting measures and operating profits will grow at a slower pace.

(This story was published in Businessworld Issue Dated 09-11-2009)

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