net profit ratio shows the relation between net profit and....?
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Explanation:
Net profit ratio (NP ratio) is a popular profitability ratio that shows relationship between net profit after tax and net sales. It is computed by dividing the net profit (after tax) by net sales.
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Answer:
Net profit shows the relation between net profit and turnover(Net sales).
Explanation:
Net profit ratio = Net profit ÷ sales x 100
Net profit is the balance remaining after deducting all direct and indirect expenses from the operating income.
Net sales is the balance remaining after deducting other income and sales returns from total turnover.
Net profit ratio helps the management to assess the profitability margin.
Net profit margin above 10% is advisable for entities.
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