Measuring and Increasing Profit

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  • Created by: lfcvish
  • Created on: 29-11-11 20:02

The efficiency of the business in achieving making profit can be measured by two formulas, return on capital and net profit margin.

Profitability = the ability of a business to generate profit, eg. a multinational company wouldn't be happy with 100,000 profit but a corner shop would.

Net profit margin:

net profit is profit made from all activities whereas operating profit is profit made from trading only.



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