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Net Profit Margin

Net Profit Margin

 

The net profit margin shows how much a business is generating profit for every dollar of cost, expenses, interest, and taxes involved. It is displayed as the percentage of how much of each dollar collected by a company as revenue translates to net profit. The calculation is similar to gross profit margin, but the formula also subtracts expenses, interest, and taxes from revenue.

Net Profit Margin = ((Revenue – Cost of Goods Sold – Expenses – Interest – Taxes)/Revenue) * 100

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