The formula to calculate Net Profit Margin (NPM) is:
\[ NPM = \frac{NI}{S} \times 100 \]
Where:
Net Profit Margin is often referred to as the bottom line, this ratio takes all expenses into account including interest.
Net income is a company's total earnings.
Sales is the total sales for the period.
Let's assume the following values:
Using the formula:
\[ NPM = \frac{NI}{S} \times 100 \]
Evaluating:
\[ NPM = \frac{200000}{1000000} \times 100 \]
The Net Profit Margin is 20%.
| Net Income (currency) | Sales (currency) | Net Profit Margin (%) |
|---|---|---|
| 100000 | 500000 | 20.00 |
| 100000 | 750000 | 13.33 |
| 100000 | 1000000 | 10.00 |
| 100000 | 1250000 | 8.00 |
| 100000 | 1500000 | 6.67 |
| 150000 | 500000 | 30.00 |
| 150000 | 750000 | 20.00 |
| 150000 | 1000000 | 15.00 |
| 150000 | 1250000 | 12.00 |
| 150000 | 1500000 | 10.00 |
| 200000 | 500000 | 40.00 |
| 200000 | 750000 | 26.67 |
| 200000 | 1000000 | 20.00 |
| 200000 | 1250000 | 16.00 |
| 200000 | 1500000 | 13.33 |
| 250000 | 500000 | 50.00 |
| 250000 | 750000 | 33.33 |
| 250000 | 1000000 | 25.00 |
| 250000 | 1250000 | 20.00 |
| 250000 | 1500000 | 16.67 |
| 300000 | 500000 | 60.00 |
| 300000 | 750000 | 40.00 |
| 300000 | 1000000 | 30.00 |
| 300000 | 1250000 | 24.00 |
| 300000 | 1500000 | 20.00 |