Determining Profit Margins in Business: Sri Sathya Sai Guidelines

To determine the profit margin, one should know the total cost. For the total cost, consider the cost of raw materials, the machine cost, the labour charges, the income tax, excise duties and share holders’ dividends. To this you can add 5% to 10% profit. 10% profit is justifiable. Even if you have higher sales revenue, take only 10% profit. 

The surplus can be used on social projects such as construction of hospitals, providing financial assistance to villagers in accordance with their needs, etc. The shareholders may demand more dividends, but you have to abide by 10% profit only.

Source: The Socially Responsive Business, Chapter 3, A Values-Based Management Perspective – Based on the Discourses of Sri Sathya Sai Baba