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Net Profit Margin under Equity Method and acquisition method
Hi esteemed forumers. I have a quick question. Why is it net profit margin for equity and acquisition method is different? In my note, it was said net profit margin is higher (relatively) under equity method compared to acquisition method. Since both methods do not actually take sales (or revenue) of investee into account, why is it sales is relatively lower for equity method than acquisition then? I understand that NI is the same under the two methods.
Thank you in advance!