# Net Profit Margin Calculator

URL: https://speedycalculator.com/calculators/finance/net-profit-margin/
Last updated: 2026-10-25

> The net profit margin calculator works out net profit margin – net income as a percentage of revenue – from revenue and either net income or the full list of expenses.

## Inputs

- Revenue
- Net income

## Results

- Net profit margin
- Total expenses
- Profit per $100 of sales

## Formula

```
Net profit margin = net income ÷ revenue × 100
Net income = revenue − COGS − operating expenses − interest − taxes
```

## Explanation

Net margin shows how much of each dollar of sales becomes profit. The average across U.S. industries is roughly 7–10%, but software firms can exceed 20% while supermarkets run at 1–3%.

### How to use the Net Profit Margin Calculator

- **Revenue**
- **Net income**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter revenue and net income.

### Tips

- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.

### Common mistakes to avoid

- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.

### Inputs explained

FieldWhat to enterRevenueAmount in your currencyNet incomeAmount in your currency

### What each result means

- **Net profit margin** = [Net income]÷[Revenue]×100
- **Total expenses** = [Revenue] - [Net income]
- **Profit per $100 of sales** = [Net income]÷[Revenue]×100

### Example values

How the main result changes when **Revenue** changes and everything else stays at the example values above:

RevenueNet profit margin (%)600,00016900,00010.671,200,00081,500,0006.41,800,0005.332,400,0004

## Worked example

Inputs — Revenue: $1,200,000; Net income: $96,000.

Results — **Net profit margin = 8 %**; Total expenses = $1,104,000.00; Profit per $100 of sales = $8.00.

## FAQ

**What is a good net profit margin?**
About 10% is average; 20% is high; 5% is low.

**How do I improve net profit margin?**
Raise prices, cut costs, or reduce interest and taxes.

**Can net profit margin be negative?**
Yes, when the company makes a loss.

**What formula does the Net Profit Margin Calculator use?**
Net profit margin = net income ÷ revenue × 100.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)