09/19/2026
💰 Financial Friday Tip: Learn Your Net Profit Margin
Revenue tells you how much your business earned from sales. Net profit tells you how much was left after expenses.
But there’s another number worth knowing: Your net profit margin.
Your net profit margin takes that net profit and shows it as a percentage of your revenue.
Here’s the simple version:
Net Profit ÷ Revenue × 100 = Net Profit Margin
For example:
If your business earned $20,000 in revenue this month and had $17,000 in expenses, your net profit was $3,000.
$3,000 ÷ $20,000 × 100 = 15% net profit margin
That means 15% of your revenue was left as net profit after expenses.
Why does this matter?
Tracking your net profit margin over time can show you something revenue alone can’t. Your sales might be increasing while the percentage you’re keeping as profit is shrinking.
More revenue doesn’t always mean a more profitable business.
💡 Financial Friday challenge: Pull up your Profit & Loss for last month and calculate your net profit margin. Then compare it to the month before.
You might learn something about your business that your bank balance wasn't showing you.
