Evaluating Net Profit Margin from Project Cash Flow Reports
By George NWOGU | BIZVILLE PROJECT MANAGEMENT Limited
Dear BIVILLEPM Community,
As a seasoned professional in the oil and gas EPC industry, I, George Nwogu, am well-suited for roles such as COO or Project Director. My extensive experience in managing complex projects and financial oversight positions me uniquely to drive strategic decision-making and operational efficiency.
To assess project profitability using cash flow reports, consider the following approach:
Net Profit Margin (based on cash flow) = [(Total Cash Inflows — Total Cash Outflows) / Total Cash Inflows] × 100
Where:
- Total Cash Inflows refer to the project’s total revenue or incoming cash.
- Total Cash Outflows include all expenses and costs incurred.
This formula provides a practical measure of the project’s profitability relative to its cash inflows, offering valuable insights when comprehensive income statements are not available.
Disclaimer: This formula offers an approximation of the net profit margin based on cash flow data. It differs from the traditional net profit margin calculation, which uses net profit from income statements. This method should be used as a proxy when detailed financial statements are unavailable.
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Warm regards,
Engr. George (Chìsom) ÑWÒGU (MBA, PMP®️)
Motto: Humanity First, then Smart and Green. 🚀
My name is George Nwogu, a Senior Project & Planning Manager, COO and Global Trainer from Nigeria. I’m the Founder of Bizville Project Management Limited
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