What is net profit margin?
Net profit margin measures how much net profit a business earns as a percentage of revenue. It reflects overall efficiency.
Why is net profit margin important?
It shows how effectively a business converts revenue into profit after all costs. It allows comparison across companies and industries.
How is net profit margin calculated?
Net profit margin equals net profit divided by revenue, multiplied by 100.
What does a high net profit margin indicate?
It indicates strong cost control, efficient operations, and effective pricing.
How can businesses improve net profit margin?
They improve it by reducing costs, increasing prices, or improving operational efficiency.