How this calculator works
Use net profit after all recognised expenses and revenue from the same accounting period. A loss produces a negative margin. The reverse modes find the profit or positive revenue consistent with a target margin. Currency inputs use Canadian dollars; any common currency yields the same ratio.
Formula
Net profit margin = net profit / revenue. Net profit = margin * revenue. Revenue = net profit / margin. Percentages are displayed as 100 times the ratio.
Worked example
Net profit of $10,000 on revenue of $100,000 gives a 10% margin. A $5,000 loss on $50,000 of revenue gives -10%.
Advertisement
Frequently asked questions
Can margin be negative?
Yes. A negative margin means the business lost money during the period.
Is this gross margin?
Gross margin subtracts cost of sales only. Net margin also reflects operating expenses, financing and tax.
What happens at zero revenue?
The margin is undefined. A zero target margin also cannot recover a unique revenue from profit.