Page 324 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

Chapter 19

4.5 Net profit margin

This ratio will be affected by all of the factors that affect the earlier ratios calculated
for gross profit margin and operating profit margin. In addition, net profit margin will
also affected by the following:

 any increase or decrease in finance costs

 any increase or decrease in tax paid

The net profit margin is calculated as follows:

Net profit after Tax
× 100%
Sales Revenue

Illustrations and further practice

318