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%.
Profit Margin ratio is the comparison of profit as a percentage of revenue and calculated as follows Profit Margin ratio = Net Profit/Revenue
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.
yes
ROA = Net Profit Margin * Asset Turnover Asset Turnover = ROA/Profit Margin = 13.5/5 = 2.7%
Return on Assets = Profit Margin X Asset Turnover
Profit Margin ratio is the comparison of profit as a percentage of revenue and calculated as follows Profit Margin ratio = Net Profit/Revenue
net profit/sales
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
gross margin ratio is calculated as >GROSS PROFIT/NET SALES
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.
Return on Assets = Profit Margin on Sales x Asset Turnover .1 = Profit Margin on Sales x 3 .033 = Profit Margin on Sales
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.
yes
net income divided by sales
Net Profit Margin = Net Profit/ Sales Revenue X 100
ROA = Net Profit Margin * Asset Turnover Asset Turnover = ROA/Profit Margin = 13.5/5 = 2.7%
profit margin = net income / total revenue