What is net profit margin?

Net profit margin is net profit divided by revenue, expressed as a percentage. It shows how much profit you keep from each dollar of sales after all expenses, including interest and taxes.

How is net profit calculated here?

Net profit is calculated as revenue minus cost of goods sold (COGS), operating expenses, interest expense, and tax expense.

Can I use this for both small businesses and larger companies?

Yes. The structure is generic. You can use it for a solo business, startup, or larger company as long as you have the relevant numbers.

Does this tool replace formal financial statements?

No. It’s an educational calculator. Formal financial statements should be prepared according to accounting standards and reviewed with an accountant or finance professional.

Net Profit Margin Calculator

Compute net profit and net profit margin from revenue and expenses, and see a simple income statement breakdown.

Total revenue ($) Cost of goods sold (COGS) ($) Operating expenses ($)

Interest expense ($) Tax expense ($) Currency label

Period label Scenario notes

Use this to compare scenarios: before/after cost changes, different revenue levels, or tax assumptions.

Tip: Run multiple scenarios to see how margin changes with revenue growth or cost reductions.

Important: This calculator uses simplified inputs. Real financial statements may include additional items (depreciation, amortization, other income/expense). Use this as a planning tool and confirm with your accountant or finance team.

Net profit margin formulas

1. Gross profit

Revenue = R
Cost of goods sold = COGS

Gross profit = GP = R − COGS

2. Operating profit (EBIT)

Operating expenses = OPEX

Operating profit (EBIT) = OP = GP − OPEX

3. Net profit and net profit margin

Interest expense = INT
Tax expense = TAX

Net profit = NP = OP − INT − TAX

Net profit margin (%) = (NP ÷ R) × 100

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