Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

Are capitalization rate and net profit margin the same thing?
Capitalization rate and "Net Profit margin" are two different things. In Capitalization rate note that we are taking the "total value" in the denominator and in Net profit margin we are taking "Revenue/Sales".  Capitalization Rate: Capitalization Rate = Yearly Income/Total Value For example (from Investopedia: ) if Stephane buys a property that will generate $125,000 per year and   he pays $900,000 for it, the cap rate is:   125,000/900,000 = 13.89%. Net Profit margin: Net Profit margin = Net Profit/Revenue For example (from finance formulas): A company's income statement shows a net income of $1 million and   operating revenues of $25 million. By applying the formula, $1 million   divided by $25 million would result in a net profit margin of 4%.   Although the formula is simplistic, applying the concept is important   in that 4% of sales will result in after tax profit.