Net Profit Margin (NPM) Calculator
Financial analysis tool to calculate bottom-line profitability. Compare your margin against S&P 500 averages for 12 major industries.
About
Net Profit Margin (NPM) is the definitive indicator of a company's financial health. While gross margin looks at production efficiency and operating margin looks at management efficiency, Net Profit Margin tells the 'bottom line' story. It answers the question: For every dollar of revenue earned, how much actual cash remains after all expenses, including taxes, interest, and one-off costs, are paid?
Investors closely monitor this metric to gauge a company's ability to turn sales into profit. A declining NPM often signals rising costs or pricing pressure before they become obvious in other metrics. Use this calculator to derive your exact margin and immediately benchmark it against historical S&P 500 averages to see if you are outperforming or lagging behind your sector.
Formulas
The formula derives the percentage of revenue that becomes net income:
Where:
- R = Total Revenue
- COGS = Cost of Goods Sold
- E = Operating Expenses
- I = Interest
- T = Taxes
Reference Data
| Industry (S&P 500) | Avg. Net Margin (%) | Low Range | High Range |
|---|---|---|---|
| Technology (Software) | 20.5% | 15% | 35% |
| Financial Services | 18.2% | 10% | 25% |
| Pharmaceuticals | 15.4% | 12% | 22% |
| Real Estate | 14.8% | 10% | 20% |
| Basic Materials | 10.2% | 5% | 15% |
| Consumer Goods | 9.5% | 6% | 14% |
| Utilities | 8.9% | 7% | 12% |
| Healthcare Services | 7.5% | 4% | 11% |
| Industrials | 6.8% | 4% | 9% |
| Energy (Oil & Gas) | 6.5% | -2% | 15% |
| Retail (General) | 3.2% | 1.5% | 5% |
| Construction | 2.8% | 1.5% | 4.5% |