Net Profit Margin Calculator
Work down from revenue through COGS, operating expenses and taxes to net profit — with gross, operating and net margins side by side.
How it works
Net profit = revenue − COGS − operating expenses − interest & taxes · Net margin % = net profit ÷ revenue × 100
Net profit margin is the share of every revenue dollar that survives all the way to the bottom line, after the cost of goods, operating expenses, interest and taxes. Walking down the income statement — gross, then operating, then net — shows where the money goes: a healthy gross margin can still produce a thin net margin if overhead or taxes are heavy. Net margin is the single best headline measure of overall profitability.
Worked example
On $100,000 of revenue with $40,000 COGS, $35,000 of operating expenses and $7,000 of interest and taxes: gross profit is $60,000 (60%), operating income is $25,000 (25%), and net profit is $18,000 — an 18% net margin.
Frequently asked questions
What is a good net profit margin?
It varies widely by industry. Across the broad market, net margins around 10% are typical and 20%+ is strong, but grocery and airlines survive on low single digits while software firms can far exceed 20%. Compare within your sector.
What is the difference between operating margin and net margin?
Operating margin stops after operating expenses, showing profit from core operations before interest and taxes. Net margin goes one step further and subtracts those too, so it reflects everything that reaches the bottom line.
Can net profit margin be negative?
Yes — if total costs exceed revenue, net profit is negative and so is the margin, indicating a loss for the period. This is common for early-stage or heavily reinvesting companies.
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Educational estimate, not financial advice.