NET PROFIT MARGIN TIPS
Analysis of Stocks, JCI, Stock Investment, Stock Recommendations - We often face problems when trying to invest, where we have to choose a company more attractive than interest. It is very difficult to determine, of course, because everything is interesting. If we have a lot of money, we can buy everything. But if our money is limited, it becomes a problem. As a solution, we must choose one of them. then, how?
Profit Margin or Net Profit Margin is the ratio of the total amount of net income to the total amount of company revenue. This term is also known by its abbreviation, NPM. NPM is typically used to measure the sheer or thickness of the firm's earnings. For example, in one sector there are:
stock-idx analysis today
The four companies managed to record the same income, which is 1 billion. But the net income generated by these four companies is different. So, obviously if the revenue is the same. By comparison in the table above, of course we are more interested to the company that recorded the highest net profit, namely PT. JKL, Tbk.
The above examples are just a simple illustration only, that the NPM is usually used to determine which companies with a certain income that can produce the maximum net profit. The authors deliberately provide examples of corporate earnings made equal but net income is different. The goal is to equate the initial perception alone.
stock analysis
We can use NPM calculations to determine which companies are interesting. The formula:
Net Profit Margin (NPM) = Net Income / Revenue
Then obtained the following results:
stock analysis
From the table it can be concluded that PT ANDALAS is the one that has a good performance performance. NPM is one of the simplest ways to help analyze which stocks we can collect.
The higher the value of NPM indicates that the company is more efficiently operational. Companies can suppress unnecessary costs, so the company is able to maximize the net profit earned. the company will grow faster into a company with great equity. However, with a note: the percentage of net income that goes as equity is much higher than the percentage of net income distributed as dividends. This growth is due to the company's net profit is always high, and net income will be entered as retained earnings which will further increase the company's equity.
NPM is used to determine which companies with certain revenue succeed in producing maximum net income. Such companies are more efficient in operations than other companies. However, it should be noted that comparing the NPM ratio of a company to another company should be done in the same sector. Given, the NPM between sectors with one another is clearly very different.
For example, a consumer food and beverage company with a property company. The margin ratio of consumer food and beverage companies is usually thin. Companies of this sector prefer high sales volume, rather than high margin but the goods sales do not sell.
Profit Margin or Net Profit Margin is the ratio of the total amount of net income to the total amount of company revenue. This term is also known by its abbreviation, NPM. NPM is typically used to measure the sheer or thickness of the firm's earnings. For example, in one sector there are:
stock-idx analysis today
The four companies managed to record the same income, which is 1 billion. But the net income generated by these four companies is different. So, obviously if the revenue is the same. By comparison in the table above, of course we are more interested to the company that recorded the highest net profit, namely PT. JKL, Tbk.
The above examples are just a simple illustration only, that the NPM is usually used to determine which companies with a certain income that can produce the maximum net profit. The authors deliberately provide examples of corporate earnings made equal but net income is different. The goal is to equate the initial perception alone.
stock analysis
We can use NPM calculations to determine which companies are interesting. The formula:
Net Profit Margin (NPM) = Net Income / Revenue
Then obtained the following results:
stock analysis
From the table it can be concluded that PT ANDALAS is the one that has a good performance performance. NPM is one of the simplest ways to help analyze which stocks we can collect.
The higher the value of NPM indicates that the company is more efficiently operational. Companies can suppress unnecessary costs, so the company is able to maximize the net profit earned. the company will grow faster into a company with great equity. However, with a note: the percentage of net income that goes as equity is much higher than the percentage of net income distributed as dividends. This growth is due to the company's net profit is always high, and net income will be entered as retained earnings which will further increase the company's equity.
NPM is used to determine which companies with certain revenue succeed in producing maximum net income. Such companies are more efficient in operations than other companies. However, it should be noted that comparing the NPM ratio of a company to another company should be done in the same sector. Given, the NPM between sectors with one another is clearly very different.
For example, a consumer food and beverage company with a property company. The margin ratio of consumer food and beverage companies is usually thin. Companies of this sector prefer high sales volume, rather than high margin but the goods sales do not sell.
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