About net profit margin calculator
Net profit margin is the share of revenue left after every cost, including expenses, interest and tax.
Formula
Net margin % = net profit ÷ revenue × 100. Revenue of ₹50 lakh and net profit of ₹4 lakh is an 8% net margin.
Compare with industry
Normal margins differ widely between industries. Compare yourself with similar businesses.
A worked example
Revenue of ₹25 lakh, cost of goods of ₹16 lakh, operating expenses of ₹6.5 lakh and tax and interest of ₹1 lakh leave a net profit of ₹1.5 lakh. The net margin is 6 percent, much lower than the 36 percent gross margin.
Find where the margin goes
Compare gross margin and net margin. A big gap points to heavy operating costs, interest or tax that you may be able to manage.
