For example, if company XYZ had total sales of $5 million for the previous year and a profit of $550,000, you divide $550,000 by $5 million. This works out to a net profit margin of 11 percent.

Net profit margin is a key financial metric that measures the percentage of revenue left as profit after all expenses are deducted. Investors and businesses can use the net profit margin to assess ...

For example, if a company generates $1,000 in revenue and has $800 in expenses, its profit is $200. The profit margin, in this case, would be 20%.

This is the formula for the profit margin ratio: Profit margin = Net income / Sales revenue. For example, net income ($1 million) divided by sales revenue ($10 million) = 10%.

For example, if your revenue is $100,000, and your expenses are $60,000, your net profit margin would be (100,000 - 60,000)/100,000, resulting in a net profit margin of 40%.

A company with $10,000 in profit from a product line that produced $100,000 in sales has a profit margin of 10 percent; if the costs for that same product line are $200,000, its profit margin is 5 ...

Since some measure of profit (often called net income or earnings) is usually the divisor in a profitability ratio, higher results are considered favorable. If a company’s gross profit margin ...

1. Gross profit margin – this is the margin that is used to measure net sales less cost of goods sold. 2. Operating profit margin – also known as EBIT (earnings before interest and taxes ...

Net Profit Margin = (Net Profit / Revenue) x 100 To calculate the net profit margin, divide the net profit by total revenue and multiply by 100 to express the value as a percentage. For example ...