Profit standards for residential contractors vary depending on the type of contractor. In general, the net profit standard for contractors in the upper tier of performance range from 5.8% to as high as 9.6% of sales.
Net Profit Margin
The profit as a percentage of net sales is referred to as the Net Profit Margin. It is business ratio used to evaluate the bottom line performance of a business against a period of time.
The net profit margin reflects the profitability of the company as a percentage of net sales. It is one of the performance ratios used in evaluating business. Interestingly, some consider it the most important ratio. These users of business ratios take a very simplistic approach towards business evaluation.