Firms that do not make a solid profit margin are a really bad sign - it means that there is little value add by the firm.
If I buy $10 worth of paints (and equipment) then use that to create and sell you a painting for $10, that is society signalling that I really should find something better to do with my time. The raw materials are about as hard to produce as the care anyone has for my work. The value created by me doing the work was $0.
On the other hand, an artist who turns $10 worth of paint into a $100 painting has created enormous value - that artist should be the one who gets all the paint, and that is what the market will sort out. That artist is not wasting time, their art is high value add over the raw materials. The time they spent on art added $90 in value.
If firms tend to have solid profit margins, almost by magic society at large will get more actual value out of the same amount of resources. Nothing is good in excess, and there is plenty of intellectual room to quibble about where the threshold and preconditions need to be for the outcome to be 'good', but investors making a solid return is very healthy. It can move society as a whole forward.
Van Gogh tried to sell his art for more than the price of parts. He was unsuccessful in his life due to being ahead of the curve. Much like Betamax, he died before being appreciated.
If I buy $10 worth of paints (and equipment) then use that to create and sell you a painting for $10, that is society signalling that I really should find something better to do with my time. The raw materials are about as hard to produce as the care anyone has for my work. The value created by me doing the work was $0.
On the other hand, an artist who turns $10 worth of paint into a $100 painting has created enormous value - that artist should be the one who gets all the paint, and that is what the market will sort out. That artist is not wasting time, their art is high value add over the raw materials. The time they spent on art added $90 in value.
If firms tend to have solid profit margins, almost by magic society at large will get more actual value out of the same amount of resources. Nothing is good in excess, and there is plenty of intellectual room to quibble about where the threshold and preconditions need to be for the outcome to be 'good', but investors making a solid return is very healthy. It can move society as a whole forward.