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Net Profit Margin

Net profit margin is a financial metric that measures a company's profitability by comparing its net income to its total revenue. In other words, it shows how much profit a company makes for every dollar of sales it generates.

Here's an example:Let's say a company has total revenue of $100,000 and total expenses of $80,000. This means the company's net income is $20,000 ($100,000 - $80,000 = $20,000).

To calculate the net profit margin, you divide the net income by the total revenue: $20,000 / $100,000 = 0.20.

This means the company's net profit margin is 20%.

Basically, a higher net profit margin indicates a more efficient and profitable company, while a lower net profit margin may indicate that the company is struggling to generate profits from its sales.

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