Profit Margin

Net Profit Margin or Profit Margin shows a company's profitability, indicating how much profit is earned per euro of revenue. It also reflects the effectiveness of the company's pricing strategy and cost management.

$$\text{Net Profit Margin} = \frac{\text{Net Profit}}{\text{Net Sales}}$$

The net profit margins of different companies are not easily comparable because their cost structures are usually very different.