When comparing companies in the same industry but of different sizes, net profit margin is more meaningful than net profit as a dollar amount.

Question

Quizplus · Accepted Answer

Net profit margin measures the profitability of a company as a percentage of its revenue, making it a more comparable metric for companies of different sizes. Net profit as a dollar amount can be influenced by various factors such as the size of revenue, expenses, and capital investment, which can differ significantly between companies of varying sizes.

When Comparing Companies in the Same Industry but of Different