## 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.

• ### What Does \$18bn of Profit Look Like?

4th July 2015

Study Notes

Study Notes

Study Notes

• ### Calculating and Interpreting Profit (Revision Presentation)

Teaching PowerPoints

• ### Measuring and Increasing Profit

Teaching PowerPoints

• ### Profitability Ratios (Revision Presentation)

Teaching PowerPoints

Topic Videos

Topic Videos

• ### Income Statements Revision Quiz

Quizzes & Activities

Topic Videos

• ### Improving Profit

Quizzes & Activities

• ### Profit Budgets - AQA/ Edexcel A Level Business Bellwork / Revision Activity

21st November 2017

• ### Profit Measurement and Importance

Quizzes & Activities

• ### Setting Financial Objectives

Quizzes & Activities

• ### Lack of Bargaining Power is Squeezing Small Business Suppliers

23rd November 2015

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