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Gross Profitability (GP/A)
Gross profit divided by total assets — how efficiently a company turns assets into profit.
Formula
Gross profit ÷ total assets
Interpretation
A quality signal distinct from pure valuation: profitable, asset-efficient companies have historically outperformed even controlling for how cheap they look.
What good looks like
High gross profitability relative to assets.
What bad looks like
Low or negative gross profitability.
Typical range
Company- and sector-dependent, centered against a reference level.
Limitations
Varies significantly by industry — an asset-light software company naturally scores differently than a capital-intensive manufacturer — so it is most meaningful cross-sectionally within a sector.
How OmniSignal uses it
One of the strongest quality factors identified in modern factor research, complementing pure value with a profitability lens.
Where it enters the score
Quality family
References
Novy-Marx (2013), "The Other Side of Value: The Gross Profitability Premium"
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