Net profit margin

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November 3, 2020 at 5:46 am #593896
gayathree1234
Member
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Hi sir,
I know net profit margin is calculated as net profit/revenue.But im unsure what are the items to be included in the revenue.
Revenue X
other operating income x
changes in inventories and x
work performed
so Net profit margin is calculated as:
1)Net profit/revenue X 100% OR
2)Net profit/( revenue+other operating income+changes in inventories…) X 100%
Thank you…
November 3, 2020 at 10:14 am #593921
John Moffat
Keymaster
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You would normally include other operating income (but not anything else).
If you have come across this in a Paper FM past exam question then I would be very surprised (even asking for the net profit margin is rare for Paper FM!)
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