NI/sales
profit margin
NI stands for Net Income, which is also known as the bottom line or profit, and is calculated by subtracting all expenses from total revenue.
Sales, on the other hand, are the total amount of money earned from the selling of goods or services. Sales are a crucial aspect of a business, as they determine the growth and revenue of the company.
The relationship between NI and sales is that for a company to be profitable, its NI should be greater than its sales. If the NI is less than sales, it means that the company is operating at a loss.
Hence, a company should aim to maximize its sales while also maintaining a healthy NI, which can be achieved by controlling expenses such as COGS (Cost of Goods Sold), operating expenses, and taxes.
In conclusion, tracking both sales and NI is essential for a company’s financial health, and companies should strive to increase sales while maintaining a healthy NI.
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