NET PROFIT MARGIN: a Ratio Made Simple

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The third instalment of our Financial Ratios series. In this video you'll learn what 'Net Profit Margin' is and I'll show how to calculate it with examples!
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⏱️TIMESTAMPS
00:00 - Intro
00:03 - Net Profit Margin Definition
00:30 - What is Profit?
00:49 - What is Net Profit?
01:30 - What is Net Profit Margin?
01:58 - Example: Net Profit Margin
02:55 - Comparison: Year on Year
03:53 - Comparison: Different Businesses
04:41 - What Decreases Net Profit Margin?
05:32 - What Increases Net Profit Margin?
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#accounting #accountingstuff #financialratios

[@AccountingStuff]

⏱️TIMESTAMPS 00:00 - Intro 00:03 - Net Profit Margin Definition 00:30 - What is Profit? 00:49 - What is Net Profit? 01:30 - What is Net Profit Margin? 01:58 - Example: Net Profit Margin 02:55 - Comparison: Year on Year 03:53 - Comparison: Different Businesses 04:41 - What Decreases Net Profit Margin? 05:32 - What Increases Net Profit Margin?

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hey bro make a vid on final account pls....

[@AccountingStuff]

@@aryabhosale7360 Thanks for your request!

[@shubhamtiwari3493]

@accounting stuff please make more about Cogs , Accumilated depreciation , Income statement ,, Balance sheet thanks for all stuff😊😊😊

[@shubhamtiwari3493]

@@AccountingStuff Hi please make more vedio about Cogs , Accumilated depreciation , Income statement ,, Balance sheet thanks for all stuff?

[@AccountingStuff]

@@shubhamtiwari3493 I've made videos on those topics already. If you search for them, followed 'Accounting Stuff' then they should pop up.

[@breetak2]

James' material allowed me to pass a Financial Accounting CLEP exam in under 2 weeks.

[@AccountingStuff]

Congrats on getting through it so quickly!!

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I'm in the same situation so I hope I can have your skills

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I was literally watching one of your videos when this came out

[@AccountingStuff]

What are the chances :)

[@syedarifhilal7048]

Kindly make videos on all Financial ratios.

[@turaytalksjourney2024]

With plenty of examples

[@AccountingStuff]

I'll do my best :)

[@turaytalksjourney2024]

@@AccountingStuff we always need the analysis of any ratio Sir.

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I'm still in high-school but according to other comments, I'm gonna ace my accounting classes thanks to this channel.

[@AccountingStuff]

You've got this!

[@BusinessBasics]

Well explained with detailed examples. Thanks for sharing!

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Awsome explanation 👍 You make accounting look cool by adding background music and awsome editing. Keep up the good work.

[@hoppop7047]

It's easy to understand! Thank you so much!

[@DreamFirms]

Everything was discussed clearly!

[@mwiilwa8957]

Thanks a million for these videos James, you deserve a noble prize for simplifying accounting. May I suggest you also make a video on the IFRS and IAS I struggle to grasp them. I am sure you take on them will be simplified and awesome. Keep up the good work :) God Bless!

[@AccountingStuff]

Thanks for your requests!

[@samm5205]

New upload ❤️ Let's gooooo!!!

[@marvinyancor4587]

subscribed! Great explanation!

[@TheGippy30]

youve smashed it again James thanks

[@AccountingStuff]

Cheers buddy :)

[@deebaji]

Awesome as always

[@AccountingStuff]

Thanks!!

[@sunwang3076]

The Animation of the table is world-classs i mean it

[@AccountingStuff]

Thanks, I spent far too long putting that bit together :)

[@grantweston1348]

Hi James, thank you very much for this wonderful series. I have thoroughly enjoyed it and really appreciate all the effort that you have put into helping others. Thanks again. Grant

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[@hassankhan3995]

Absolutely love these videos, they’ve been helping me out so much and I appreciate you for all you do. ❤️ I do have one request though, can you cover Cost Accounting? I’m really struggling with it and I hope you could make a series for it aswell. Thanks again!

[@AccountingStuff]

Thanks for your request!!

[@adeoluwaosundina7456]

Liquidity Ratios Please? Thank you James.

[@anvaymayekar1891]

Wonderful series just completed It....I'm a science student who is enthusiastic about the business and financial world therefore I decided to learn the LANGUAGE OF BUSINESS and JAMES the way you taught it was just fabulous and ineffable as this concepts seems obscure to other...If the professors in the every college will teach like you it will foster fascination within a student towards learning and drastically transform the entire world You are like a GURU for me and btw GURU is beyond a teacher it means a person who will take you from DARKNESS (IGNORANCE) to LUMINANCE(KNOWLEDGE) and enlighten his disciple I hope bro you'll just not limit yourself with teaching accounting but expand it to various domains of BUSINESS & FINANCE and in this journey I'M WITH YOU & WE ARE WITH YOU Great Regards and Veneration to you....my guru ♥

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Your videos are very useful

[@AccountingStuff]

Thanks, I'm glad to hear it :)

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Never stop uploading please 🙏🏻🙏🏻🙏🏻🙏🏻👍🏻👍🏻👍🏻

[@AccountingStuff]

I don't plan to stop anytime soon :)

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@@AccountingStuff 😊❤

[@darkshinigami9438]

Amazing series! Can you make a series of videos about all tax related topics and also about each IFRS and IAS?

[@AccountingStuff]

Thanks for your requests!

[@TheRobbo007]

Very informative 👍🏻

[@AccountingStuff]

Glad you think so!

[@wilfredduhaylungsod8676]

done watching. Great learning video

[@user-sg1qu8io6v]

Your vids are incredibly simple to understand. Would love to see one about free cash flow definition. There is so much confusion out there. Thanks a lot for your valuable content! Best from Barcelona

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[@oneilanelson9231]

You are great at teaching, James. Kudos

[@AccountingStuff]

Thank for your kind words :)

[@samm5205]

James can you do Cost Accounting? That would help us a lot❤️

[@AccountingStuff]

Thanks for your request!

[@mariamalee7538]

Wooo incredible thanks very much James

[@AccountingStuff]

No problem! Hope it helps :)

[@nipunfernando8373]

Well explained. thanks for the video

[@AccountingStuff]

Thanks Nipun!

[@stroberri6649]

Underrated video

[@ultralegendarybeast101]

Please do more accounting videos!!!!!!!!!!!!!!!!!! I want to learn more. Maybe you could also make a cheat sheet of all of the accounting terms and definitions as well. :)

[@adeoluwaosundina7456]

Efficiency Ratios such as Average inventory, Inventory Turnover etc. Please? Thank you James.

[@AccountingStuff]

Thanks for your requests!

[@ErickandDerrick]

Do you have a video on worksheets? I couldn't find one, lol. I am currently in uni for accounting, and I've fallen into a rhythm of watching your videos as a compliment to my lessons. Getting your perspective has been a HUGE benefit for me! Can you believe that my school doesn't even mention the DEALER anacronym? Usually, I can find one of your videos that relate directly to whatever I am studying in that chapter, but I couldn't find one on worksheets. Could you do one soon?

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Are you all good now?? You posted it couple months ago and could help u. :)

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Thanks for sharing! 👍

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[@justinaposkeviciute3945]

Can you also do the same with the remaining categories of financial ratios: Efficiency, Liquidity, Financial gearing and Investment ratios? Thank you

[@panther7318]

Thank you for all these fantastic tutorials!!! Could you please make one about Ethics in accounting, or detailed about GAAP and IFAS? Thank you so much!!!

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[@AccountingStuff]

My pleasure 😊

[@TheFrodofreak]

Great explanation, absolutely chaotic music 🙂

[@AccountingStuff]

Haha thanks

[@humanbeing6267]

you are accounting god

[@justinaposkeviciute3945]

Can you also create a video on Budgeting in this context?

[@adeoluwaosundina7456]

Break even formula please? thank you James.

[@adeoluwaosundina7456]

Leverage ratio which is Debt/Equity ratio please? Thank you James

[@karimahwahad-ali7240]

Hi james by chance you have any video on managerial accounting bc i recently that the course and i don't understand it to me i understand much better when u explain🙏🙏🙏

[@AccountingStuff]

Not yet, but it's something I'd like to cover eventually

[@karimahwahad-ali7240]

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Can you please make a video on Bank Reconciliation plssss. God bless youu✨

[@AccountingStuff]

I made this one a while ago... kzbin.info/www/bejne/sJnQgGZ6gpiMn7s

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[@AccountingStuff]

@@nabilahabdulrahim5190 No worries :)

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Thank you so much your videos helped me a lot, Can you explain the difference between vertical and horizontal analysis Also can you support us with examples and case studies

[@AccountingStuff]

Thanks for your requests!

[@afzalarif1124]

Please make series on all the financial ratios... 1) Profitability ratios 2) Debt management ratios 3) Activity ratios 4) market Value ratios 5) liquidity ratios

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Can you do a video on inventory turnover?

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Hey, please make a vid on bank reconciliations. Thanks

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May you do Variance Analysis ?

[@AccountingStuff]

Thanks for your request :)

[@dainty58]

Can you continue on the other ratios and breaking them down too? On the performance, efficiency and for the share holders?

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Hey, will you have videos about management accounting?

[@AccountingStuff]

Not yet but I plan to cover it eventually!

[@wiki012]

@@AccountingStuff It would be great!

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Please explain Deferred Tax Assets and Deferred Tax liabilities in detail under TAxation, if possible cover Lease too

[@AccountingStuff]

Thanks for your requests!

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Can you also create a video on Managing Working Capital?

[@likebot.]

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[@likebot.]

"... they were able to increase their net profit by 5%." 3:42 I look at increasing profit margin from 7 cents on the dollar to 12 cents on the dollar as increasing the net profit by 71%. Is this why I need to go to school?

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[@adeoluwaosundina7456]

Return of capital employed formula please? Thank you

[@AccountingStuff]

Cheers, I'll keep that in mind!

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Glad you enjoyed it!

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Hello James

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Hey Munesh!

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Return On Capital Employed Please? Thank you James.

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Notification gang

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I am in !

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Your quick book complete video's in .course.

[@AccountingStuff]

Thanks for your request!

[@aghizain2838]

Hi.. I have a question.. Is a net profit same with retained earnings? So, i have a task to make a closing entries at university. But i have a problem while making retained earnings Statements.. Can anyone help me? I'm a beginner 😁✌️

[@AccountingStuff]

They are related. Retained Earnings is the cumulative Net Profit held in the business (after removing dividends)

[@aghizain2838]

@@AccountingStuff Thank you for the answer.. It's really helpful 🤗 But i have another question.. Should we add Share Capital Ordinary into Retained Earnings Statements??

[@vdog6107]

let’s say the total revenue for the quarter the business generated on a base level is 3824 dollars and a net profit of 1478 dollars 1478/3824 = ITS based on the percentage of how much money the business gets to keep as net income from the revenue

[@AccountingStuff]

Correct!

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[@samglick8479]

Can we get the free cash flow???

[@MrRODNEYTWO]

Easy to do when you have the numbers, Where is the video on the new business

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AMD and Intel :)

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So net profit is earnings.

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Liquid

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That's a new one! haha

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It's so fucking annoying how different people use profit, revenue and other words synonymously when they're clearly not the same. It drives me crazy.

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Lame

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i couldnt balance theeeeeeesssse?????????????????? in a game of life and death?