Net profit margin = net profit/revenue

Profit margin is calculated with selling price (or revenue) taken as base times
100. It is the percentage of selling price that is turned into profit, whereas
"profit percentage" or "markup" is the percentage of cost price that one gets
as profit on top of cost price. While selling something one should know what
percentage of profit one will get on a particular investment, so companies
calculate profit percentage to find the ratio of profit to cost.
The profit margin is used mostly for internal comparison. It is difficult to
accurately compare the net profit ratio for different entities. Individual
businesses' operating and financing arrangements vary so much that different
entities are bound to have different levels of expenditure, so that comparison
of one with another can have little meaning. A low profit margin indicates a low
margin of safety: higher risk that a decline in sales will erase profits and result
in a net loss, or a negative margin.
Profit margin is an indicator of a company's pricing strategies and how well it
controls costs. Differences in competitive strategy and product mix cause the
profit margin to vary among different companies
COMPETITOR Cp to MANUFACTURER WHOLESALE RETAILER CONSUMER
manufacturin R
g co.
Bombay 800 15.50% 1199
dyeing
Portico new 7.85% 999
york
Swayam 1494

Raymond 6.42% 1099

Spaces 1599

Profit margin is the gross profit a retailer earns when an item is

sold. In the apparel segment of retail, brands typically aim for a 30-
50% wholesale profit margin, while direct-to-consumer retailers aim
for a profit margin of 55-65%
COMPETI Cp to GP COST TO Marg COST MARIGI CONSU
TOR manufactu on WHOLESA in of TO B OF MER
ring co. Man LER whol RETAIL RETAILE
u. e ER RS
Cost seller
Bombay 800 15% 920 10% 1012 15% 1163.8
dyeing
Portico 725 12% 812 8% 876.96 14% 999.734 999
new york
Swayam 1025 16% 1189 9% 1296.0 15% 1490.41 1494
1
Raymond 755 15% 868.25 10% 955.07 15% 1098.34 1099
5
Spaces 1050 18% 1239 12% 1387.6 15% 1595.83 1599
8