How to calculate Net profit margin
The Net profit margin formula, with plain worked examples you can check yourself.
Net profit margin = NI ÷ R × 100
The result is a percentage (%).
Worked examples
R = 700 · NI = 175Net profit margin = 25%
R = 900 · NI = 90Net profit margin = 10%
R = 400 · NI = 20Net profit margin = 5%
How to use it
- Write down the values for each letter in the formula.
- Do the brackets first, then divide or multiply.
- Multiply by 100 to show the answer as a percentage.
- Compare the answer with last period or with a competitor to see if it is good or bad.
This formula belongs to Profit & Margins.
Related terms
Practice Net profit margin with real numbers
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