Overview
Enter net income (or loss) and revenue to calculate net profit margin: (net income ÷ revenue) × 100. This shows what percentage of revenue remains as profit after all expenses, interest, and taxes are deducted - it's one of the most commonly cited profitability metrics because it captures the bottom line, not just operating performance. A negative net income produces a negative margin, shown as-is rather than treated as an error; only a revenue of exactly zero is rejected, since it's the denominator. Runs entirely client-side, and this is an informational estimate, not financial advice.
Best for: Measuring what percentage of revenue converts into bottom-line profit
How to use this tool
- Enter net income. Bottom-line profit (or loss) after all expenses, interest, and taxes.
- Enter revenue. Total revenue for the same period - cannot be zero.
- Read the margin. Net income as a percentage of revenue.
Frequently asked questions
It means the company had a net loss for the period - expenses, interest, and taxes exceeded revenue. This tool computes and displays the negative percentage directly rather than blocking it, since a loss is a valid (if undesirable) business outcome.
EBIT and EBITDA measure operating profitability before interest, taxes (and, for EBITDA, depreciation and amortization) are deducted. Net profit margin uses net income, the true bottom line after everything has been subtracted, so it's a stricter, more complete profitability measure.
It varies widely by industry - software companies often post margins above 20%, while grocery retailers commonly operate in the low single digits. Comparing a margin to industry peers is generally more useful than judging it against a single universal benchmark.