Net Profit Margin

Profitability
Updated Apr 2026 • Has calculator

The percentage of revenue that remains as profit after all expenses and taxes.

What is Net Margin?

Net profit margin divides net income by total revenue to show what fraction of every dollar of sales ultimately flows to the bottom line after deducting all costs, including operating expenses, interest, and income taxes. Unlike gross margin, it captures the full cost structure of the business. Net margin varies widely by industry — grocery retailers may earn 1–3%, while software companies can exceed 20% — so it is most useful for peer comparisons and trend analysis within the same sector.

Formula

Net Margin = (Net Income ÷ Revenue) × 100

Worked Example

Worked example — Apple Inc. (AAPL)

FY2024

Step 1  Net income: $93,736M
Step 2  Revenue: $391,035M
Step 3  Net margin = $93,736M ÷ $391,035M × 100 = 23.97%
Step 4  → Apple kept $0.24 of net profit for every $1 of revenue

Source: Apple Annual Report FY2024 (2024-11-01)

Calculate Net Margin

Net income (after tax); may be negative (USD millions)

Total net revenue (USD millions)

Net Margin

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Not investment advice.

How to Interpret Net Margin

< 0
Negative — company is unprofitable
0 – 5
Thin — competitive or high-volume industry
5 – 15
Average — healthy for most industries
> 15
Strong — high-margin, efficient business model

📚 Profitability Metrics — Complete the path

  1. Gross Margin
  2. Operating Margin
  3. EBITDA Margin
  4. Net Margin
  5. ROE
Sources
  1. Apple Inc. — Annual Report FY2024
  2. CFA Institute — Financial Reporting and Analysis, 6th ed.
  3. Investopedia — Net Profit Margin