Net Profit Margin

Net profit margin measures the profit that a company produces from its total revenue, and this value is expressed as a percentage. Also known as net margin, this business metric is one of the biggest indicators of overall financial health of a company and is often used to evaluate a company’s success over time.

The formula for net profit margin is as follows:

Net Profit Margin =

R – COGS – O – I – T x 100

Where R = Revenue, C = Cost of goods sold, O = Operating and other expenses, I = Interest, T = Taxes