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Accounting and Tax Prep Among the 15 Most Profitable Industries

Accounting and Tax Prep Among the 15 Most Profitable Industries

 The 15 Industries with the Highest Net Profit Margin – Last 12 Months

Based on an analysis of the financial statements of privately-held companies, Sageworks, a financial information company, ranked all industries by net profit margin over the last 12 months and found that accounting services topped the list, with a net profit margin averaging 19.8 percent in the 12 months ended July 2014. The other industries in the top five are legal services, oil and gas extraction, equipment rental and leasing and offices of dentists. Seven of the top fifteen industries are related to health care or real estate. Net profit margin has been adjusted to exclude taxes and include owner compensation in excess of their market- rate salaries.

“Many of these industries are consistently at the top of the list because they are profitable by their very nature,” explained Sageworks analyst Jenna Weaver. She points out that service-based businesses can attain strong profit margins based on their ability to keep costs low, while being able to charge a premium for their specialized services. “These kinds of businesses sell services from bookkeeping to legal advice to health care and do not need to purchase as many, if any, physical goods,” Weaver said.

NAICS Code Industry Net Profit Margin
5412 Accounting, Tax Preparation, Bookkeeping, and Payroll Services 19.8%
5411 Legal Services 17.8%
2111 Oil and Gas Extraction 16.4%
5324 Commercial and Industrial Machinery and Equipment Rental and Leasing 16.4%
6212 Offices of Dentists 14.9%
5311 Lessors of Real Estate 14.1%
6211 Offices of Physicians 14.1%
5312 Offices of Real Estate Agents and Brokers 14.1%
6213 Offices of Other Health Practitioners 12.6%
5511 Management of Companies and Enterprises 12.6%
6214 Outpatient Care Centers 11.7%
6116 Other Schools and Instruction 11.3%
5313 Activities Related to Real Estate 10.8%
8122 Death Care Services 10.7%
2131 Support Activities for Mining 10.5%




Source: Sageworks at https://www.sageworks.com/pdf/Data_Release_08062014.pdf

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