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Net Profit Margin
Video
Helps You Identify If
- Your Cost Of Goods Sold Is Changing
- You Are Discounting Too Much
- Market Competition Is Increasing Or Decreasing
- General Overheads Is Increasing Or Decreasing
What Is Net Profit Margin?
What Does It Mean?
How Is It Calculated?
How Can I Improve My Net Profit Margins?
What Should I Look For
Your profit does not necessarily indicate the positive levels of cash generated by your business. It is, however, a reliable time-based measure for gaining an understanding into the overall value that the business is providing. It is also useful to compare the efficiency of different businesses. For instance, a business generating a net margin of 10% is wholly more efficient at generating excess profits (and maybe ultimately cash) relative to its costs than a business generating 5% margins.
