net profit margin
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Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses have been paid.
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Profit Margin
A measure of how well a company controls its costs. It is calculated by dividing a company's profit by its revenues and expressing the result as a percentage. The higher the profit margin is, the better the company is thought to control costs. Investors use the profit margin to compare companies in the same industry and well as between industries to determine which are the most profitable.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
net profit margin
Aftertax net income divided by net sales, a measure of management's ability to carry a dollar of sales down to the bottom line for the stockholders. In other words, net profit margin refers to that which is left for the owners from a dollar of sales after all expenses and taxes have been paid. Also called net margin. Compare gross profit margin, return on sales.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.