Net profit margin measures the share of revenue left as net income after all expenses. It is a compact bottom-line profitability measure, but it should be interpreted with capital structure, tax effects, and cyclicality in mind.
Formula
Net profit margin = Net income / Revenue
Use net profit margin with EBITDA margin, free cash flow margin, and ROIC to understand whether growth converts into durable value. Compare sector ranges in net profit margin by industry.
Related calculator: Net Profit Margin Calculator.