Industry Trends
Profitability trends emerge in industries as well. It is more alarming if your downward trend goes against industry norms. If the industry has shown a 3 percent increase in gross profit margin over two years, but your gross profit margin has declined, your business is going against the trend. Ideally, your company's profitability trends are equal to or better than the industry. If the whole industry is experience an economic downturn, a more modest decline in profitability for your business is reasonable.