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A profit margin can be negative if the company had a negative net income. For eample if the company had $100,000 in net sales, but their net income was ($10,000) then (10,000)/100,000 = (10%) or negative 10%.

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Q: Can a profit margin ratio be negative?
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Related questions

How do you calculate a profit margin ratio?

Profit Margin ratio is the comparison of profit as a percentage of revenue and calculated as follows Profit Margin ratio = Net Profit/Revenue


How do you calculate profit margin ratio?

net profit/sales


profit margin?

it is also known as net profit margin. this ratio shows how much net income a company earns from operations. a higher ratio implies higher profit earned. profit margin is calculated as follows:profit margin = (Net income / Revenue) * 100


How do you calculate gross margin ratio?

gross margin ratio is calculated as >GROSS PROFIT/NET SALES


What are the Limitations of profit margin ratio?

The limitations for the profit margin ratio is in comparing different industries. Profit margins between say a supermarket and an aircraft manufacturer would vary considerably.


What is the profit margin if the asset turnover ratio is 3 time and the return on asset is .1?

Return on Assets = Profit Margin on Sales x Asset Turnover .1 = Profit Margin on Sales x 3 .033 = Profit Margin on Sales


How do you calculate net profit margin if there is net loss?

The Gross Profit Margin = Gross Profit/Revenue*100 regardless of weather the Gross Profit is positive or negative (a loss). Therefor, it is acceptable to have a negative Gross Profit Margin.


Inventory turnover ratio affect profit margin?

yes


What is profit margin ratio?

net income divided by sales


Formula for net profit ratio?

Net Profit Margin = Net Profit/ Sales Revenue X 100


What is the asset turnover ratio if the profit margin is 5 percent and the return on assets is 13.5 percent?

ROA = Net Profit Margin * Asset Turnover Asset Turnover = ROA/Profit Margin = 13.5/5 = 2.7%


What is the formula for profitability ratio?

profit margin = net income / total revenue