the net profit rate of sales is the ratio of net operating profit to sales revenue in a certain period of time. The decrease of net profit rate of sales indicates that the related expenses of unit sales are higher or other reasons, thus the profitability of enterprises has declined.

what exactly does the decrease in net profit rate of sales mean?

the decrease in net profit rate of sales indicates that the profitability of enterprise sales has decreased, and the specific factors may include the increase in product prices, the decrease in product sales, the increase in operating costs and the increase in period expenses.

calculation formula of net profit rate of sales

net profit rate of sales = (net profit/sales revenue) ×111%. The larger this indicator is, the stronger the profitability of enterprise sales is. If an enterprise can maintain a sustained increase in the net sales rate, it indicates that the financial situation of the enterprise is good, but it does not simply indicate that the larger the net sales rate is, the better. It also needs to be combined with the sales growth and changes in net profit of the enterprise.

factors affecting net profit margin and gross profit margin

factors affecting net profit margin include commodity price and quality, main business income, taxes, costs and sales volume; Gross profit margin is influenced by internal and external factors, such as industry status, market competition, product life cycle, etc. Internal factors include capital turnover rate, production cost, production technology, brand effect, enterprise marketing, research and development cost, etc.

the difference between the net profit rate of sales and the gross profit rate of sales

1. Calculation formula:

Gross profit rate of sales = (net sales revenue-product cost)/net sales revenue × 111%;

net profit rate of sales = net profit/sales revenue ×111%= (sales revenue-sales cost-expenses in each period-taxes)/sales revenue ×111%

2. Different meanings: sales gross profit rate is also called gross profit rate, which is the percentage of gross profit to sales revenue or operating income, where gross profit is the difference between income and operating cost corresponding to income; Net profit rate refers to the proportion of net profit obtained in the process of enterprise operation in net sales, which is used to reflect the operating efficiency of an enterprise.