Use our net profit margin calculator to work out both net profit and percentage (%) profit margin. Knowing how much profit your business makes is important. The business may have great sales, but if all the sales are eaten up by the cost of sales and expenditure the business can not survive. A high net profit margin normally means that your sales are calculated at around the right price. If the figure is low, it is worth spending some time reviewing both sales prices and overheads to see where improvements can be made. This figure is normally calculated over a period of time, which can be a month, quarter or year.
Net Profit Margin Formula
The first thing to do is to look at the formula.The figures are taken from the Profit and Loss account. The best way to produce a profit and Loss is by using good accounting software like QuickBooks or FreshBooks.