How do you calculate a stock's net profit margin?


by montana , in category: Stocks and Equities , a year ago

How do you calculate a stock's net profit margin?

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1 answer

by jaylin.bartell , a year ago


To calculate a stock's net profit margin, you need to divide its net profit by its total revenue and multiply the result by 100 to express it as a percentage. The formula for net profit margin is:

Net Profit Margin = (Net Profit / Total Revenue) * 100

Where: Net Profit: The profit after deducting all expenses, including taxes and interest, from total revenue. Total Revenue: The total revenue generated from sales of goods or services.

To obtain these values, you can refer to a company's income statement or financial statements, which are usually publicly available on their website or through financial databases. The net profit margin allows you to assess a company's profitability by understanding how efficiently it converts revenue into profit.