Question

The current net profit of sigma inc. is $8 million, the market price of the stock is $65, and sales is $50 million. the net profit margin of sigma inc. is:____.

Answer 1

The net profit margin, or simply net margin, measures how much net income or profit is generated as a percentage of revenue.

It is the ratio of net profits to revenues for a company or business segment. Net profit margin is typically expressed as a percentage but can also be represented in decimal form.

How do we calculate net profit margin?

Net profit margin is calculated by dividing the net profits by net sales, or by dividing the net income by revenue realized over a given time period.

What is good net profit ratio?

For example, in the retail industry, a good net profit ratio might be between 0.5% and 3.5%.

Other industries might consider 0.5 and 3.5 to be extremely low, but this is common for retailers. In general, businesses should aim for profit ratios between 10% and 20% while paying attention to their industry's average.

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