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Net Income Margin – Meaning, Formula, Calculation & Interpretations [Video]

Net Income Margin – Meaning, Formula, Calculation & Interpretations

In this tutorial, you will learn what Net Income Margin is, its formula, calculate it using a practical example, and interpret the results. Furthermore, we will calculate the Net Income Margin in Excel using the Colgate Case Study.
You can download the Colgate Net Income Margin template from this link – https://www.wallstreetmojo.com/ratio-analysis-template/

What is Net Income Margin?
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The net profit margin is the percentage of a company’s earnings (also known as net profit) that remains after deducting all operating and non-operating expenses in a given period.

Formula
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Net Income Margin Formula = Net Profit/Net Sales * 100

Uses
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– Using the net profit margin formula, investors can determine how much a company profits from its revenue.
– If the company’s net profit is less than its net sales, investors will want to know why and may investigate other important information about the company.
– Similarly, if the net margin is excessive, investors must examine other details to determine why the net margin is too good to be true.
– Furthermore, knowing the net margin formula tells them how much net profit a company can extract from its net revenue.

For more details, you can refer to our article – https://www.wallstreetmojo.com/net-profit-margin-formula/

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