2) Fundamental Analysis
Big revenue doesn't mean much if profit is thin. NPM shows what percentage of every dollar in revenue actually becomes net profit. This is the difference between a company that's busy but broke vs. one that's efficient and profitable.
NPM (Net Profit Margin) = Net Income / Revenue x 100%. An NPM of 15% means for every $100 in revenue, the company keeps $15 as net profit after all costs, taxes, and interest are paid.
Imagine two online stores. Store A has Rp1 billion/month revenue but only Rp10 million net profit (NPM 1%). Store B has Rp200 million/month revenue but Rp40 million net profit (NPM 20%). Which is healthier? Store B! Big revenue without healthy margins = working hard but not getting rich.
Consumer goods companies like UNVR typically have 15-20% NPM due to premium brands. Construction or trading companies usually have thinner NPM (2-5%) due to tight competition and high costs. Always compare NPM within the same sector.
After understanding this concept, apply it in tools so decisions become more objective and measurable.
Open Fair Value CalculatorWhat NPM is considered good?
Depends on sector. For consumer goods 10-20% is good, tech 15-30% is good, banking 20-35% is good, construction 3-8% is normal. Always compare within the same sector.
