What does net profit margin mean on the CPA exam?
Net profit margin. Net income divided by sales. What share of every revenue dollar survives to the bottom line.
Which CPA exam sections use net profit margin?
Net profit margin appears in the FAR section of the CPA exam.
Related terms
- net income: What is left after every revenue and expense of the period, including tax and discontinued operations.
- contribution margin: Sales less variable cost.
- total asset turnover: Sales divided by average total assets.
- equity multiplier: Total assets divided by equity.
- gross profit: Sales less the cost of goods sold, before any operating expense.
- days sales outstanding: How long on average it takes to collect a receivable, measured as receivables divided by credit sales per day.