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Dear Tutor,
In the question No. 17 from the BPP Kit the Net profit margin is calculated using the PBIT (14.749/74521= 19,8%).
Why did they use the PBIT and not the net profit?
In financial accounts, net profit is normally the profit after tax.
However we are not doing financial accounts – we are measuring how well the company is being run, and therefore net profit in this context always means net operating profit, which is the profit before interest and tax.
I do explain this in my free lectures.
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