After-tax profit margin

After-tax profit margin

The ratio of net income to net sales.
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
References in periodicals archive ?
The after-tax profit margin for Group Benefits(3) was 6.5% as of the second quarter of 2018, compared to 3.3% as of the second quarter of 2017.
But chief exec Michael O'Leary said the airline had cut fares while maintaining a "world-leading" after-tax profit margin.
A recent survey asked high-school graduates to estimate the after-tax profit margin at an average company.
Even the National Wholesale Druggists' Association report on a fall in after-tax profit margin could have a silver lining.
The tax changes could also lead to a big increase in the company's after-tax profit margins, Falzon said.
The combined after-tax profit margins of three of the largest medical electronics manufacturers, Boston Scientific, Medtronics and St.
His objectives in this, as in any business, are simply stated: Grow market share, and keep after-tax profit margins at 20 percent or better.
IT costs consume 2.2 percent of revenue - a hefty chunk of most companies' after-tax profit margins - according to a new benchmark study piloted by Financial Executives Institute and The Hackett Group.