📊 Net Profit Margin Calculator
Calculate net profit margin
Profit after all expenses and taxes
How to Use This Calculator
Enter Net Income
Input the net income (net profit) - profit after all expenses, including cost of goods sold, operating expenses, interest, and taxes.
Enter Revenue
Enter the total revenue - all income from sales, services, or other business activities for the same period.
Review Net Profit Margin
See the net profit margin percentage - the percentage of revenue that becomes net profit after all expenses. Higher margins indicate better profitability.
Formula
Net Profit Margin = (Net Income / Revenue) × 100
Example Calculation:
If net income $200,000, revenue $1,000,000:
• Net profit margin = ($200,000 / $1,000,000) × 100 = 20%
• This means 20% of revenue becomes net profit
About Net Profit Margin Calculator
A net profit margin calculator helps you calculate the net profit margin percentage, which measures the profitability of sales after all expenses are deducted. Net Profit Margin = (Net Income / Revenue) × 100. Net profit margin shows the percentage of revenue that becomes net profit after all expenses, including cost of goods sold, operating expenses, interest, and taxes. Higher margins indicate better profitability and efficiency. Net profit margin is a key metric for assessing overall profitability and financial performance.
When to Use This Calculator
- Profitability Analysis: Assess overall profitability
- Performance Comparison: Compare profitability across companies
- Financial Analysis: Analyze financial performance
- Investment Analysis: Evaluate company profitability
Understanding Net Profit Margin
- Higher Margin: Better profitability (generally good)
- Lower Margin: Lower profitability (may need improvement)
- Industry Standards: Margins vary by industry
- Overall Profitability: Most comprehensive measure of profitability
Why Use Our Calculator?
- ✅ Profitability Analysis: Calculate net profit margin accurately
- ✅ Performance Comparison: Compare profitability across companies
- ✅ Financial Analysis: Analyze financial performance
- ✅ Investment Analysis: Evaluate profitability
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
What is net profit margin?
Net profit margin measures the profitability of sales after all expenses are deducted. It's calculated as (Net Income / Revenue) × 100. Net profit margin shows the percentage of revenue that becomes net profit after all expenses, including cost of goods sold, operating expenses, interest, and taxes. Higher margins indicate better profitability and efficiency. Net profit margin is a key metric for assessing overall profitability and financial performance.
What's a good net profit margin?
A good net profit margin depends on the industry and business model. Generally, net profit margins above 20% are considered excellent, 10-20% are good, 5-10% are average, and below 5% are low. However, margins vary significantly by industry: Software/SaaS (15-25%), Retail (2-5%), Manufacturing (5-10%), Services (10-15%). Compare to industry benchmarks and historical trends. Higher margins indicate better profitability and efficiency.
How is net profit margin different from gross margin and operating margin?
Net profit margin includes all expenses, while gross margin and operating margin include only certain expenses. Gross margin = (Revenue - COGS) / Revenue (excludes operating expenses, interest, taxes). Operating margin = Operating Income / Revenue (excludes interest, taxes). Net profit margin = Net Income / Revenue (includes all expenses). Net profit margin is the most comprehensive measure of profitability and shows the final profit after all expenses.
Why is net profit margin important?
Net profit margin is important because it: (1) Measures profitability - shows overall profitability after all expenses, (2) Performance comparison - enables comparison of profitability across companies, (3) Financial analysis - key metric for evaluating financial performance, (4) Investment analysis - used by investors to evaluate profitability, (5) Efficiency - indicates how efficiently revenue is converted to profit. Net profit margin is the most comprehensive measure of profitability and is essential for financial analysis.