> Low margins aren't an indicator of anything. They are a component of financial return in addition to capital. One does not make sense without the other. In high frequency trading, they are making 1/100000th of a percent on a trade, that is a very high return business if you can do this millions of times a day. Similarly, if I run a housebuilder then I need a 20% margin because I am going to be turning over my inventory across multiple years.

This is wrong because quarterly reporting normalizes for expenses in same period

The part you have quoted is a written explanation of the DuPont formula. It is nothing to do with reporting periods, it is just a calculation of the return from a business. A high-margin business is not, necessarily, a high-return business (and in the context of the discussion above, high returns is a sign of exploitation...dollar stores are low returns, the shareholders are being exploited not customers).