What is the difference between Gross Profit Margin and Net Profit Margin?

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Below are core differences:

Meaning : Gross Profit Margin is the percentage of the Gross Profit over Sales. Net Profit Margin is the percentage of Net Profit over Sales.

Advantage : G.P. Margin is Helpful in knowing about the percent of profit earned from the core business by the company. N.P. Margin is Helpful in knowing about the percent of actual profit earned by the enterprise.

Objective : G.P. Margin's Object is to know about the efficiency of the company in the production and distribution activities. N.P. Margin's Object is to know about the financial health of the company.

Gross Profit Margin = (Revenue - Cost of Goods Sold) / Revenue

Net Profit Margin = (Revenue - Cost of Goods Sold - Operating Expenses and all other expenses) / Revenue

Gross profit margin and net profit margin are two separate profitability ratios used to assess a company's financial stability and overall health.

Gross profit margin = (revenue - cost of goods) / revenue

Net profit margin = (revenue - cost of goods - operating expenses - other expenses - interest - taxes) / revenue

-Gross margin is total sales revenue minus it costs  of goods sold  .so it represents the percent  of total sales revenue that a company retains after incurring the direct costs associated with producing goods & services it sales.

Gross margin=Revenue of goods sold/ revenue

-but  net profit margin takes all expenses of business into account, so we put  in consideration other expenses such as wages of sales reps,product distribution& miscellaneous operating expenses also tax.

Gross Profit Margin uses the profit before any of the non-product expenses (SG&A etc) are deducted from the revenue. The only expenses deducted are COGS (cost of good sold).

Net Profit Margin uses the profit after all the expenses are deducted from the revenue.

Net profit always less than the grossas it deducts from the gross other general and Admin expense, selling and marketing, and add/deduct other revenues /expense that has a indirect relation to the operation. and finally deduct the interest and taxes.

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I am agreement with the answers given

the gross profit is the direct income from the company activities ant it comes from matching the revenues with the cost of revenues and the net profit is a result from all the company activities

Gross profit margin profitability ratio used to assess a company's financial stability.

Net profit margin profitability ratio used to assess a company's overall health.

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I agree with all previous answers.

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Gross profit include only direct expenses and net profit is the final profit after deduction of all overhead expenses.