Likewise, when there is no, or limited reliable information
publicly available on the gross margin derived by third parties.
Transactional profit methods become the most appropriate ones.
We look in more detail at the transactional profit methods.
First, we will discuss the transaction net margin methods, and
secondly we address the profits break methods.
The transactional net margin method works similarly to the resale price method and
the cost plus method.
What works at the level of the operating profit margin in relation
to an appropriate base such as costs, sales, or assets.
Operating profit is equal to the difference between gross profit and
operating expenses.
In this respect, a net profit margin analysis is found to be more reliable
than a gross margin analysis.
When there are material differences in functions between the tested and
the uncontrolled transaction.