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Net Profit Margin
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
Net Profit Margin Video
Play Video about Net Profit Margin Graphic
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.
