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How to Calculate Net Profit Margin: Definition & Formula

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What is net profit margin?

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1. Why is a higher net profit margin better?

2. What numbers are needed before the net profit margin can be calculated?

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About This Quiz & Worksheet

Knowing net profit margin can help a company immensely. These study tools will test you on definitions related to net profit margin as well as scenarios involved in net profit margin.

Quiz & Worksheet Goals

Definitions you'll need to know to understand the quiz material include:

  • Revenue
  • Net profit margin
  • Net profit

Skills Practiced

Skills essential to passing this quiz include:

  • Critical thinking - apply relevant concepts to examine information about high net profit margin in a different light
  • Information recall - access the knowledge you've gained regarding the net profit margin formula
  • Knowledge application - use your knowledge to answer a question about information needed to calculate net profit margin

Additional Learning

Finish the quiz and head over to the related lesson, How to Calculate Net Profit Margin: Definition & Formula. The lesson will cover these objectives:

  • Relate net profit margin to profitability
  • Understand the components of net profit margin
  • Explore how to gauge the success of your business
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