March 16, 2022

How to Choose an Investment: Net Profit Margins

Onu ABCs

Investing can feel intimidating, but we're here to simplify it a bit. Your investing journey starts today!

When it comes to choosing what stocks or shares to buy, you might find yourself feeling overwhelmed. How do you determine growth over time? Of course there are obvious choices. A historically successful software company, a social media platform, something in green energy.'

There are ways to determine a company’s profitability and potential growth and one important piece of this puzzle is something called a net profit margin. There are many numbers to keep track of when learning about a company, but the net profit margin is a single number that gives you a snapshot of the company’s health. The net profit margin is the revenue made after all expenses have been accounted for. These numbers are also helpful for the businesses themselves, as they use these statistics to examine and reassess their practices for maximum profit and growth.

Nasdaq, the first electronic exchange, published an article naming net profit margins among the most important things to consider when investing. 

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This information is educational, and is not an offer to sell or a solicitation of an offer to buy any security. This information is not a recommendation to buy, hold, or sell an investment or financial product, or take any action. This information is neither individualized nor a research report, and must not serve as the basis for any investment decision. All investments involve risk, including the possible loss of capital. Past performance does not guarantee future results or returns. Before making decisions with legal, tax, or accounting effects, you should consult appropriate professionals.