Final answer:
The "net profit margin on sales" measures the percentage of net profit generated from sales revenue. It is calculated using the formula (Net Profit / Sales Revenue) * 100%.
Step-by-step explanation:
The "net profit margin on sales" is a financial metric that measures the profitability of a company by evaluating the percentage of net profit it generates from its sales revenue. It indicates the efficiency of a company in generating profits from its sales activities. The formula to calculate the net profit margin on sales is:
Net Profit Margin on Sales = (Net Profit / Sales Revenue) * 100%
For example, if a company has a net profit of $50,000 and sales revenue of $500,000, the net profit margin on sales would be (50,000 / 500,000) * 100% = 10%.