The all things being equal makes no sense in this regard.
It's like me saying "all things being equal except you're a duck"
You can't be a duck and have all things equal. Same way a company can't be equal to another company and have a $4bn backlog. This isn't an independent variable like the color of your logo.
> PE would probably be satisfied to make half the profit and double the margin, especially if it also happens to position the company for a more favorable sale. Would you rather buy a business that's at 5 or 10% margin?
So PE doesn't maximize profit but instead maximizes profit margin? This makes no sense. Why?
Because they don’t want to have to work that hard for their money. They get more value for their effort by focusing on something else instead of trying to maximize profit for a single business.
The demand curve for a business could be such that you sell 100 widgets and get $100 profit, sell 200 widgets get $101 profit. Why bother trying to sell more than 100 widgets?
Maybe you can sell 50 widgets and make $90, that sounds like a pretty good deal. Instead of making 50 more widgets you could do something else and make more than $10 profit in the same time.