Net profit margin is the percentage of revenue remaining after all operating expense, interest, taxes and preferred stock dividends have been deducted from a company’s total revenue.

Net profit margin is one of the most important indicators of a company’s financial health.

**Formula to calculate net profit margin.**

**Example:**

A company’s revenue is $ 500,000, while its net profit is $350,000. Calculate the company’s net profit margin.

Therefore, the company’s net profit margin is 70%.