Latest Free Templates

Monday, April 11, 2011

Net Profit Ratio Formula & Example

Definition: Net Profit Ratio (also known as Net profit margin/percentage) is the ratio of net profit to net sales expressed as a percentage.

Formula:
Net Profit Ratio = (Net profit / Net sales) * 100%

Example 1:
Vincent Ltd. has a total sales of $300,000, Returns inwards $20,000, Cost of goods sold $70,000, and Operating expenses $50,000. Calculate NP ratio.

Solution:
Net sales = 300,000 -

0 comments:

Post a Comment