Net Profit Margin
Net profit as percentage of revenue.
Formula
Net Profit Margin = (Net Profit ÷ Revenue) × 100
Real World
Aldi operates on a net profit margin of around 2–3%, far lower than luxury brand Burberry's ~15%, illustrating how pricing strategy and market positioning directly affect profitability per pound of sales.
Exam Focus
When comparing margins, always link to the business model — low margin with high volume can outperform high margin with low volume.
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