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Finance
Net Profit Margin
The percentage of revenue that remains as profit after all expenses are subtracted.
Net profit margin = Net Profit / Revenue × 100. It's one of the best overall health checks for a business. High gross margins help, but controlling operating expenses is what protects the bottom line.
Compare it to industry averages — software companies often have higher margins than physical product retailers.
It's what actually ends up in your pocket after paying for everything — products, ads, rent, taxes, salaries, everything. A 10% net margin on £100,000 revenue means £10,000 profit.
Real world: A well-run online business might aim for 10-20%+ net margins. Low margins mean little room for error or growth. Tracking it monthly helps spot rising costs or pricing issues early.
💡 Net profit margin shows the true bottom-line efficiency of your business — everything else is just steps toward this number.