Net Profit Margin (NPM)

NPM is the full journey from sales to the owners' residual. It includes operating costs, interest, and tax. A high NPM means a large share of revenue becomes profit.

It is not comparable across companies with very different debt or tax situations. Two equally good operators can show different net margins because one borrowed more.

Use NPM to see whether growth is profitable after everything. Sales can double while NPM halves, and the shareholder is no better off in profit terms.

Other income, a tax credit, or a minority-interest swing can lift NPM without a better product. Prefer operating margin when you want the business, and use NPM when you want the owner's outcome.