Definition of Annual Net Profit Margin

The amount of profit made by the company from their net sales, expressed as a percentage is known as Annual Net Profit Margin. It is calculated over one fiscal year.

Points to remember:

• It is expressed as a ratio of net profit to the total revenue of the company.
• Publicly traded companies release these profit margins quarterly and mention it in their annual report as well.
• Low-profit margins do not necessarily mean low profits for the company.