This net profit margin calculator shows how much of each revenue dollar becomes actual profit after all expenses. Enter total revenue and total expenses to see your bottom-line margin.
How Net Margin Is Calculated
Net Profit Margin = (Revenue − Total Expenses) ÷ Revenue × 100
Net profit margin is the bottom-line ratio. Total expenses here means everything: cost of goods sold, operating costs, interest, and taxes. The result tells you how efficiently your business turns sales into profit.
Worked Example
Revenue of $100,000 with $85,000 in total expenses yields $15,000 net profit and a 15% net margin — 15 cents of profit per sales dollar.
Why It Matters
- It is the clearest single measure of overall profitability.
- Tracking it over time shows whether costs are growing faster than sales.
- It lets you benchmark against competitors regardless of size.
Net margin varies widely by industry — grocery stores run on thin margins while software firms often post high ones — so always compare within your sector.