Method

Net income divided by revenue, taken straight from each company's own SEC filing for financial year 2024. No adjustments, no estimates, no model. Here is everything that could reasonably be argued with.

The metric

Net margin. Bottom-line profit after cost of goods, operating expenses, interest and tax, over total revenue.

Kroger took $147.1bn in revenue and reported $2.67bn of net income, so 1.8 cents on the dollar. That is the number the game asks you to guess.

Source

Every US-listed company files a 10-K, tagged in XBRL and published free by the SEC. Three calls to the frames API return revenue and net income for every filer in one go:

data.sec.gov/api/xbrl/frames/us-gaap/Revenues/USD/CY2024.json
data.sec.gov/api/xbrl/frames/us-gaap/RevenueFromContractWithCustomerExcludingAssessedTax/USD/CY2024.json
data.sec.gov/api/xbrl/frames/us-gaap/NetIncomeLoss/USD/CY2024.json

Revenue is taken from RevenueFromContractWithCustomer… where present and Revenues otherwise. Values are as originally filed. We do not chase restatements.

Verify any of it. Pull the company's 10-K on EDGAR, take net income and total revenue off the income statement, divide. You should land on what we show. If you find one that does not reconcile, tell us and we will fix it.

Exclusions

6,040 companies reported net income for CY2024. 4,380 also reported revenue. We cut that to 1,859, then selected 140 recognisable names for the game.

Excluded	Count
SIC 6000–6799. Banks, insurers, REITs and asset managers. Their revenue tagging is not comparable: interest income and premiums do not map onto the contract-revenue tag. Our first pass returned MetLife at 188% and HighPeak Energy at 8,509%, which is how we found the problem.	720
SIC 2833–2836, 8731. Biotech and pharma research, largely pre-revenue. Margin is not a meaningful measure of a company running trials.	434
Revenue below $200m, where a single non-recurring item dominates the ratio.	—

SIC codes come from the SEC's own Financial Statement Data Sets, merged across six quarters so coverage is complete rather than partial.

The franchisor problem

McDonald's 31.7% is not a restaurant margin. Roughly 95% of McDonald's restaurants are franchised. Its revenue is mostly royalties and rent, about $6bn in royalties alone in 2024, and it owns much of the property underneath. The operator who actually sells the food carries the food cost, the labour and the rent, and runs nowhere near 31.7%.

The same applies to Wingstop, Yum! Brands, Domino's and Restaurant Brands. Chipotle, Starbucks, Texas Roadhouse and Shake Shack are company-operated, so their income statements really do describe the economics of selling a meal. The game shows both, which is the point: the spread between them is a business-model story, not a food story.

The benchmark

The premise that people guess high is measured, not assumed. A Reason-Rupe survey put the public's estimate of the average company's profit margin at 36%. Across our 1,859, the median is 4.6% and only 2.1% clear 36%. A 2023 consumer survey found shoppers estimated their grocer's net margin at about 35%; the grocery sector runs 1–3%.

None of that is a defence of anything. Thin margins on very large revenue still produce very large absolute profits, and margin says nothing about market power, buybacks, or what a company pays the people doing the work. The claim here is narrow: the number most people carry in their head is off by roughly an order of magnitude.

Where this stops being useful

One fiscal year. 2024 was a writedown year for Intel and a strike year for Boeing, and an extraordinary year for Nvidia. Single-year margins are noisy.
Net margin only. Operating margin, gross margin, ROIC and free cash flow all tell different and sometimes more flattering stories. We picked the one non-specialists already have an intuition about.
Accounting effects. Some figures are moved by one-off tax items, impairments or divestitures rather than trading. Pinterest's 2024 is flattered by a valuation allowance release.
US-listed only. Private companies file nothing comparable, so Subway, Chick-fil-A and In-N-Out cannot appear at all.

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