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.](https://www.learntocalculate.com/wp-content/uploads/2020/07/net-profit-margin-1.png)
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.](https://www.learntocalculate.com/wp-content/uploads/2020/07/net-profit-margin-2.png)
Therefore, the company’s net profit margin is 70%.