After-tax profit margin(redirected from After Tax Profit Margins)
After-tax profit margin
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
After-Tax Profit Margin
A measure of how well a company controls its costs after taxes. It is calculated by dividing the company's net income (profit after taxes) by its net sales. A high after-tax profit margin often means the company controls its costs well and provides a value for the shareholder's investment. However, a low after-tax profit margin is not necessarily a negative sign. Some companies and industries are expensive to run and have low margins by their nature, relying on sheer volume to generate profits. However, a high after-tax profit margin is generally seen as better if it is at all feasible.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved