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Net profit Margin = Net Profit/ Sales Sales = 150% of direct costs = 150% of 96 lakh = 1,44,00,000 Calculation of Net profit: Sales 1,44,00,000 Less: Direct costs -96,00,000 Less: operating costs -16,00,000 EBIT 32,00,000 Less: Interest on debt (8% on 80 lakh) -6,40,000 Profit Before tax 25,60,000 Less: Tax (30%) -7,68,000 Net Profit 17,92,000 Net profit Margin = 1792000/14400000 = 12.44%
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