# Net Profit Margin

The net profit margin measures the percentage of each sales dollar remaining after all expenses, including taxes, have been deducted. It is calculated as follows:

Net profit margin = | Net income after taxes |

Sales |

For Jimco's the net income margin for 1993 is:

$6,580,000 | = .129, or 12.9% |

$51,000,000 |

industry average = 16.13%

## Return On Investment (roi)

The return on investment (ROI), measures the overall effectiveness of management in generating profits with its available assets.

Return on investment = | Net income after taxes |

Total assets |

Jimco's return on investment in 1993 is

$1,800,000 | = 0.58, or 5.8% |

$32,000,000 |

industry average = 5.9%