The net profit margin is a profitability ratio that measures the percentage of revenue that results in net profit.
Page written by Ian Hawkins. Last reviewed on May 14, 2025. Next review due April 6, 2027.
This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
Net profit margin is calculated using the following formula:
Net Profit Margin = (Net Profit / Total Revenue) * 100
To calculate the net profit margin, follow these steps:
Determine your net profit: Calculate your net profit using the formula mentioned earlier, which is the difference between total revenue and total expenses.
Calculate your total revenue: This includes all the income generated from sales, services, or any other sources.
Apply the formula: Divide your net profit by your total revenue, then multiply the result by 100 to get the net profit margin percentage.
The net profit margin is a useful metric for evaluating the profitability of a business. A higher net profit margin indicates that a higher percentage of revenue is converted into profit, which is generally considered favourable. However, it’s important to consider industry standards and compare the net profit margin with competitors or historical data to gain a better perspective on your business’s performance.
We work with world class partners to help us support businesses with finance
Swoop Finance Limited helps UK firms access business finance by working directly with businesses and their trusted advisors. We act as a credit broker, not a lender, and do not provide loans or finance products ourselves. We introduce applicants to a panel of lenders, equity funds, and grant agencies based on individual circumstances and creditworthiness.
Commission Disclosure: We typically receive a commission from the finance provider (either a fixed fee or a fixed percentage of the amount you receive) upon successful placement. Different providers pay different rates. For certain lenders, we may have influence over the interest rate, which can impact the total amount payable under your agreement.
Regulatory Information:
FCA: Authorised and regulated by the Financial Conduct Authority as a credit broker (FRN: 936513) and registered as an Account Information Services Provider (Ref: 833145).
ICO: Registered with the Information Commissioner’s Office (Ref: ZA600162); registration can be verified at ico.org.uk.
Company Details: Registered in England & Wales with Companies House (No. 11163382). Registered Address: The Stable Yard, Vicarage Road, Stony Stratford, Milton Keynes, MK11 1BN. VAT Number: 300080279.
Terms: All finance and quotes are subject to status, income, and terms and conditions. Applicants must be aged 18 or over. Guarantees and indemnities may be required. Please refer to our terms and conditions and our complaints procedure for further details.
UK
IRE
AU
CA
US
ZA
NA
yet? Register here!