Plain-language questions
Ask for net profit margin per month, customer or product in the SQL Explorer with AI. The AI writes the SQL, you see the query and run it yourself; the AI only receives metadata.
KPI · Finance
Net profit margin: formula and example.
Net profit margin is net profit after tax as a percentage of revenue. It shows how much of each euro of revenue is ultimately left once all costs, depreciation, interest and tax have been paid. It is the broadest measure of a company's profitability.
Net profit margin formula
Net profit after tax ÷ revenue × 100%
Worked example
Acme Groothandel had revenue of €12,000,000 in 2025. After cost of goods sold (€8,400,000), staff costs (€1,800,000), other operating expenses (€840,000), depreciation (€240,000), interest (€120,000) and tax (€150,000), net profit is €450,000. Net profit margin is €450,000 ÷ €12,000,000 × 100% = 3.75%.
Fictitious figures for Acme Groothandel, a sample wholesaler.
How to read this KPI
A higher net profit margin means the business keeps more of its revenue. Because interest and tax are included, it is also affected by how the company is financed and by tax choices, so read it alongside gross margin and EBITDA margin. Focus on the trend over several years and on the comparison with budget.
Pitfalls with net profit margin
- Not separating one-off items, such as selling a building or restructuring costs, which distorts the margin.
- Comparing a monthly figure without tax or year-end adjustments with an audited annual figure.
- Comparing companies with very different financing: high interest costs reduce net margin even when operations are just as healthy.
SQL & DAX
Calculating net profit margin in SQL and DAX
Two examples on a fictitious data warehouse for Acme Groothandel: a PostgreSQL query and a measure for a Power BI model. Adjust table and column names to your own model.
SELECT date_trunc('year', entry_date)::date AS year,
SUM(amount) FILTER (WHERE account_group = 'revenue') AS revenue,
SUM(CASE WHEN account_group = 'revenue' THEN amount ELSE -amount END) AS net_profit,
ROUND(100.0 * SUM(CASE WHEN account_group = 'revenue' THEN amount ELSE -amount END)
/ NULLIF(SUM(amount) FILTER (WHERE account_group = 'revenue'), 0), 2) AS net_profit_margin_pct
FROM gl_entries
WHERE account_group IN ('revenue', 'cogs', 'personnel', 'other_opex', 'depreciation', 'interest', 'tax')
GROUP BY 1
ORDER BY 1;Net Profit =
CALCULATE(SUM(GL[Amount]), GL[AccountGroup] = "revenue")
- CALCULATE(SUM(GL[Amount]), GL[AccountGroup] IN {"cogs", "personnel", "other_opex", "depreciation", "interest", "tax"})
Net Profit Margin % = DIVIDE([Net Profit], CALCULATE(SUM(GL[Amount]), GL[AccountGroup] = "revenue"))In ENABLE
Tracking this KPI in ENABLE
In your Power BI dashboard
Define the KPI as a measure in your Power BI model and show it in the portal, with "Last refreshed" next to it. Access profiles and optional row-level security decide who sees which figures.
Custom dashboards (pilot)
Add the KPI as a tile to a custom dashboard, compared with last year. The Dashboard Builder is a pilot and can be switched on per client.
Monthly targets
With the built-in Targets app you set a target for the KPI per month, so you see actuals and target side by side.
FAQ
Frequently asked questions
How do you calculate net profit margin?
Divide net profit after tax by revenue and multiply by 100%. With €450,000 of net profit on €12,000,000 of revenue, net profit margin is 3.75%. Use the same period for both figures.
What is the difference between net profit margin and operating margin?
Operating margin looks at operating profit before interest and tax, while net profit margin looks at profit after both. The gap between the two shows how much financing costs and tax take out of the result.
Can net profit margin be negative?
Yes, if the business makes a loss, net profit margin is negative. That happens when total costs, including interest and tax, exceed revenue. Check first whether the loss comes from one-off items or from day-to-day operations.
Further reading
- KPI libraryFinancial KPIs: formulas and examplesFinancial KPIs show how profitable, liquid and solvent an organisation is. The data usually comes from your accounting package or ERP: general ledger entries, invoices and open items.Read more
- ResourcesHow to build a KPI dashboard: steps and examplesA KPI dashboard is an overview of the key figures you use to steer towards your goals, such as revenue, margin, on-time delivery or absenteeism. A good KPI dashboard does not start with the software, but with the decisions it needs to support. You then choose a limited number of KPIs, define them, sketch the dashboard and only then build it.Read more
- SolutionPower BI dashboard portal: share dashboards securelyShare your Power BI dashboards securely in your own portal, with role-based access.Read more
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