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Net Profit Margin

For a business to survive in the long term it must generate profit. Therefore the net profit margin ratio is one of the key performance indicators for your business.

Use information from your business' annual profit and loss statements to input into the calculator.

For information on using this calculator see below.

Input your sales amount $ Field required
Input your net profit before Tax amount $ Field required

A red star Field required indicates a mandatory field.
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The net profit margin ratio indicates profit levels of a business after all costs have been taken into account.

It is worth analysing the ratio over time. A variation in the ratio from year to year may be due to abnormal conditions or expenses. Variations may also indicate cost blowouts which need to be addressed.

A decline in the ratio over time may indicate a margin squeeze suggesting that productivity improvements may need to be initiated. In some cases, the costs of such improvements may lead to a further drop in the ratio or even losses before increased profitability is achieved.

The net profit margin ratio indicates profit levels of a business after all costs have been taken into account.

It is worth analysing the ratio over time. A variation in the ratio from year to year may be due to abnormal conditions or expenses. Variations may also indicate cost blowouts which need to be addressed.

A decline in the ratio over time may indicate a margin squeeze suggesting that productivity improvements may need to be initiated. In some cases, the costs of such improvements may lead to a further drop in the ratio or even losses before increased profitability is achieved.

The calculation used to obtain the ratio is:

 

Net Profit Margin =

 Net Profit    x 100
    Sales

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NOTE: The calculator is provided for illustrative purposes only and the calculations are based on the accuracy of the information provided by you. The information about the calculators and the results of the calculations are necessarily general and are only intended as a guide. When deciding on what your business will do, many factors need to be considered, including your business' situation and financial position.

ANZ will not store the information provided in this calculator.