Subtract total expenses from revenue to get net profit and net margin percent.
Overview
Net profit is what remains after every expense attached to the period—not just product cost. It is the bottom-line view of profitability.
Enter revenue and total expenses to see net dollars and net margin percent.
Use it alongside gross margin: healthy gross with weak net often points to overhead or marketing spend.
Steps
Total sales for the period.
All operating costs for the same period.
Review net profit and net margin.
Raise expenses to model inflation or hiring.
Run prior periods to spot trends.
Math
netProfit = revenue − expenses; netMargin% = netProfit / revenue × 100
Net profit is revenue minus all expenses. Divide by revenue for net margin.
Worked cases
Net $35,000 → 17.5%
17.5% net margin.
Net $50,000 → 25%
25% net margin.
Net −$12,000 → −15%
−15% net margin.
Why use this
Questions