![]() ![]() While net income is a key metric for investment measurement in traditional industries, it is not that important for technology companies. ![]() The metric varies widely from industry to industry. However, net profit margin as an investment criterion has its own share of pitfalls. Hence, a strong net profit margin is preferred by all classes of investors. Net profit margin helps investors gain clarity on a company’s business model in terms of pricing policy, cost structure and manufacturing efficiency. Moreover, a higher net profit margin compared to its peers gives the company a competitive edge. Further, strength in the metric not only attracts investors but also draws well-skilled employees that eventually add to the value of the business. In fact, net profit margin can turn out to be a potent point of reference to gauge the strength in a company operations and cost-control measures.Īlso, higher net profit is essential for rewarding stakeholders. In simple terms, net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. ![]() Net Profit Margin= Net profit/ Sales * 100. It is indicative of the company’s ability to manage its resources, thereby making it the paramount metric to assess its profitability. Net profit margin signifies the financial standing of a company. In order to estimate the profit limit, there is no better measure than the net profit margin. Top Stocks with Substantial Net Profit Margin to Invest Inīusinesses earning big bucks are pursued by all and sundry. ![]() SKYW and Argo Group International Holdings, Ltd. Chicago, IL – Stocks in this week’s article are Enova International Inc. ![]()
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