# Net Profit Margin Calculator

Net Profit

\$

Total Revenue

\$
 Net Profit Margin:

Free online net profit margin calculator – Calculate your net profit margin with ease using our online calculator. Simply input net profit and total revenue and then click the calculate button.

## What is Net Profit Margin?

Net profit margin is a ratio that measures the percentage of revenue that a company retains as profit after all expenses have been deducted. It is an important financial metric that investors, analysts, and business owners use to evaluate the financial performance of a company.

## Net Profit Margin Formula

Net profit Margin = (Net profit / Total Revenue)/100

Where:

Net Profit = Revenue – Cost of Goods Sold – Operating Expenses – Taxes and Interest

Total Revenue = Total sales or revenue generated by the company

## How to Calculate Net Profit Margin

Example:- If a Company’s Net Profit is \$20000 and Total Revenue is \$360000 in the first quarter then calculate the net profit margin.

Net Profit Margin = (Net Profit / total revenue) * 100 = (20000/360000) * 100 = 5.55%

Net profit margin is 5.55% in the first quarter of the company

## Importance of Net Profit Margin

Net profit margin is a critical financial metric that helps investors, analysts, and business owners understand the financial health of a company.

High net profit margin:- it indicates that a company is able to generate a significant amount of profit from its revenue, which is a positive sign for investors and owners.

Low net profit margin:- it indicates that a company is struggling to generate profit from its revenue and may need to make changes to its operations or pricing strategies.