Net profit margin is a metric you can use to measure your business’ profitability by comparing your net income with revenue. Net income is the revenue you have left over after costs of goods sold, operating costs, and other expenses like taxes, debts, and related payments. Net income can also take into account other sources of income you generate outside of your business. Here’s how you calculate net profit margin:
Net Profit Margin = (Revenue - Costs of Goods Sold - Operating Costs - Taxes - Other Expenses) / Revenue * 100
With net profit margin, you can find out how much of each revenue your business makes turns into profit after accounting for associated costs and expenses.