Net Profit Margin as the Sole Performance Measure PowerPoint Presentation

Net Profit Margin as the Sole Performance Measure - PowerPoint Presentation ExampleThe paper tells that a good management social organisation should be able to efficiently manage expenses and cost in order to affix return. A partnership is not well managed if there is a decline in the kale profit margin everyplace successive fiscal periods. It means that it is not using the resources available efficiently. In the case of Integrated engineering Services UK Limited, it was becoming increasingly difficult to meet the 6% Net profit Margin. There were quaternity factors that were found to be the contributing to the increase in overheads. The response was budgetary control and improving financial planning. Net profit margin brings to attention some avoidable or unnecessary costs that perfect(a) profit margin (gross profit over revenue as a percentage) may not be able bring out. Net profit margin can be used as a basis of price control. It provides the best benchmark through which t o formulate a pricing strategy. Integrated applied science Service UK Limited has a fixed net profit margin of 6% .Contracts with clients have to be calculated with this net profit margin percentage in consideration. Net profit margin as the sole performance measure has the advantage of being able to detect the companys net earnings trends. A company that is doing well will have a consistent or increase in net profit margin. This is particularly important when look for investors. Investors are not only looking for companies that have increasing profit over the years, but a company that is also having its net profit margin increasing over the years. Net profit margin can be used as a measure of a companys strength.