It basically indicate the amount of Net Profits earned by the company on each dollar of Sales.
The formula for Net Profit Margin is
(Net profit / Total Sales ) * 100
Net profit is the ultimate profit earned by the company after reducing all types of Expenses including Taxes.
It is the profit available for distribution as Dividend to the Equity Shareholders.
Our article on Net Profit Margin ratio Formula and Interpretation explain this topic in greater depth along with examples, formulas and real life applications.
- Similar to our Excel templates, this template helps you to calculate Net Profit Margin ratio quickly.
- The file already has the Balance Sheet and Income Statement in different working sheets.
- You can populate the financials of any company and the main calculation sheet will calculate the Net Profit Margin for you easily