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After-Tax Profit Margin

What is ‘After-Tax Profit Margin’
After-tax profit margin is a financial performance ratio calculated by dividing net income by net sales. A company’s after-tax profit margin is significant because it shows how well a company controls its costs. A high after-tax profit margin generally indicates that a company runs efficiently, providing more value, in the form of profits, to shareholders.

BREAKING DOWN ‘After-Tax Profit Margin’
This financial measure also communicates how much income is earned per dollar of sales. The after-tax profit margin alone is not an exact measure of a company’s performance or determinant of the effectiveness of its cost control measures. However, with other performance measures, it can accurately depict the overall health of a company.

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