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 means the amount of profit you make measured in a percentage. This can include:

Gross Profit margin

Net Profit margin

Markup Profit margin

Profit Margin ratio is the comparison of profit as a percentage of revenue and calculated as follows

Profit Margin ratio = Net Profit/Revenue

The Net Profit Margin is an Expression of the Net Profit as a percentage of the Revenue, where the Net Profit is the Revenue minus all Expenses. The Net Profit Margin can be calculated in the following ways:

Net Profit Margin = Net Profit/Revenue*100

[or]

Net Profit Margin = (Revenue - all Expenses)/Revenue*100

Gross Profit Margin = Gross Profit/Revenues Net Profit Margin = Net Profit/Revenues