Net profit margin is the percentage of revenue remaining after all operating expense, interest, taxes and preferred stock dividends have been deducted from a company’s total revenue.
Net profit margin is one of the most important indicators of a company’s financial health.
Formula to calculate net profit margin.
Example:
A company’s revenue is $ 500,000, while its net profit is $350,000. Calculate the company’s net profit margin.
Therefore, the company’s net profit margin is 70%.
