Net Profit Margin Calculator

Formula

The formula to calculate the net profit margin is:

\[ NPM = \frac{NP}{R} \times 100 \]

Where:

$NPM$ is the net profit margin (%)
$NP$ is the total net profit
$R$ is the total revenue

What is Net Profit Margin?

A net profit margin is defined as the ratio of the total net profit to the total revenue. It represents how much profit a company makes for every dollar of revenue. This formula can be used for a single product or for a total company as a whole.

Example Calculation 1

Let's assume the following values:

Net Profit (NP) = $10,000
Total Revenue (R) = $50,000

Using the formula:

\[ NPM = \frac{10,000}{50,000} \times 100 = 20\% \]

The Net Profit Margin is 20%.

Example Calculation 2

Let's assume the following values:

Net Profit (NP) = $5,000
Total Revenue (R) = $100,000

Using the formula:

\[ NPM = \frac{5,000}{100,000} \times 100 = 5\% \]

The Net Profit Margin is 5%.