The National Directory of Certified Public Accountants

Ask A CPA - Buying & Selling a Business

What Is The Net Profit Margin As It Relates To Financial Statements ?

The Net Profit Margin measures the percentage of each sales dollar remaining after all expenses including taxes have been deducted. The higher the business's net profit margin the better. "Good" net profit margins differ considerable across industries. Net profits after taxes divided by Sales = Net Profit Margin.

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