Enter the net profit and total revenue into the net profit margin calculator. The calculator will yield a result in a percentage.

Net Profit Margin Formula

The following formula is used to calculate a net profit margin.

NPM = NP / R *100
  • Where NPM is the net profit margin (%)
  • NP is the total net profit
  • R is the total revenue

To calculate the net profit margin, divide the net profit by the total revenue, then multiply by 100.

This formula could be used for a single product or a total company as a whole.

Net Profit Margin Definition

A net profit margin is defined as the ratio of the total net profit to the total net revenue.

How to calculate net profit margin?

How to calculate net profit margin?

  1. First, determine the total net profit

    The total net profit should be equal to the total revenue minus the total costs. Costs include anything from raw material to labor if looking at a single product.

  2. Second, determine the total revenue

    The total revenue is equal to the total price of a good times the number of times it’s been sold.

  3. Calculate

    Enter the information from steps 1 & 2 into the formula or calculator. The result will be the net profit margin percentage.


What is Net Profit Margin?

Net profit margin is a percent that represents the ratio of profit to total revenue. It’s similar to margin, but instead of taking the ratio of total revenue to costs, it’s the ratio of total profit to revenue.

What is a good net profit margin?

The answer to this question depends on the surface or good. Improving the net profit margin is always good for the performance of a company.

net profit margin calculator
net profit margin formula