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How to Calculate Net Profit Margin.
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How to Calculate Net Profit Margin.

Rosemary Njeri

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.

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.

Calculate Net Profit Margin.

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

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