How to calculate net profit margin
Net profit margin (calculation)
Net profit margin is net profit divided by revenue, times 100. It tells you what portion of total income is profit.

How to calculate net profit margin
Example of a net profit margin calculation
Let’s say your business makes $20,000 by cleaning offices. It costs you $8000 to provide those services. And you spent another $7000 on operating expenses and taxes. Here’s how to work out your net profit margin.



Your net profit margin shows what percentage of your revenue is actual profit after all expenses are deducted. This number shows how efficient your business is at turning income into profit.