
Net profit margin
The net profit margin means the percentage of total sales revenue accrued after subtracting costs and costs from them, and is calculated by dividing the net profit or loss achieved by net sales revenue, and the following formula is taken: net profit = net profit or loss ÷ net sales revenue) x 100%
The net margin reveals what the company actually achieved by achieving profit for every dollar, and also indicates the extent of the facility's ability to control its costs and fully control it, in addition to considering the net profit margin as an effective way to compare the conditions of the specialized establishments in In the same context, as the company with the highest profitability imposes its control thanks to its control over costs when compared with other competitors, and the net profit margin plays an effective role in many non-operating expenses in companies, such as benefits and financial compensation.
Net profit can be defined as the gross output of what has been gained from operating profit, after adding other revenues and subtracting other expenses, in addition to deducting Zakat from the total net profit in pursuit of the net operating profit.
Based on the foregoing, until we reach the net profit, the accountant must increase the total profit to other revenues from other expenses, in the case of increasing it, the profit will be achieved, but if the sum of the total profit decreases with other income over the expenses, the net loss will be achieved.
The net margin reveals what the company actually achieved by achieving profit for every dollar, and also indicates the extent of the facility's ability to control its costs and fully control it, in addition to considering the net profit margin as an effective way to compare the conditions of the specialized establishments in In the same context, as the company with the highest profitability imposes its control thanks to its control over costs when compared with other competitors, and the net profit margin plays an effective role in many non-operating expenses in companies, such as benefits and financial compensation.
Net profit can be defined as the gross output of what has been gained from operating profit, after adding other revenues and subtracting other expenses, in addition to deducting Zakat from the total net profit in pursuit of the net operating profit.
How to calculate net profit
To calculate the net profit, it is necessary to find the values of the following equations in order if the value of some equations is lost, namely:- Net purchases = purchases - (return on purchases + earned discount).
- Procurement cost = net purchases + procurement expenses.
- Cost of sales = first-term goods + cost of purchases - end-of-term goods.
- Net sales = sales - sales return - allowable discount.
- Gross profit = net sales - cost of sales.
- Net profit = gross profit + revenue-expense.
Based on the foregoing, until we reach the net profit, the accountant must increase the total profit to other revenues from other expenses, in the case of increasing it, the profit will be achieved, but if the sum of the total profit decreases with other income over the expenses, the net loss will be achieved.
0 Comments