Net Profit Margin Calculator
If you want to compare net income to total revenue earned by a company, or if you want to find out net profit/income generated as a revenue percentage, then you can use our Net Profit Margin Calculator.
Net profit margin, also known as net income margin, is the profit percentage earned/generated from the revenue after clearing all expenses and accounting for entire cash flow items. However, The type of industry can vary the company's typical profit margin ratio. Moreover, It is usually represented in percentage form, but you can also express it in decimal form.
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Formula of Net Profit Margin Calculator
To find the net income margin manually, you can use the formula listed below, or we can use our net profit margin calculator to get your answer instantly.
Net Profit Margin = net profit / total revenues
Note:
To know about return on employed capital, you can use our Return On Employed Capital Calculator.
Example
For a more precise understanding of the net profit margin concept, let us have an example below:
In the last year, Suppose a multinational company generated revenue of $1,500,000, and as stated in its cash flow statement, $155,000 is the net income/profit earned by it. Now calculate the net profit margin earned by a company.
Given data
Total revenue = $1,500,000
Net profit/income = $155,000
To Find
The Net Profit Margin = ?
Solution
To find NPM, we will use the formula listed below:
Net Profit Margin = net profit / total revenues
Putting values in the formula:
Net Profit Margin = 155000 / 1500000
The net profit margin earned by a company is 10.3%.
How to use the Net Profit Margin Calculator?
The steps to use the net profit margin calculator are as follows:
Step 1: Enter the value of operating profit in the first required input.
Step 2: Enter the value of the tax rate in the second required input.
Step 3: The calculator will automatically display an answer on the screen.
Calculator use
To determine the company profit estimation, you can use our net profit margin calculator. Just enter the required values, and it will generate the answer on the screen.
