When you have deducted all the expenses in your profit, the total percentage of revenue is called a “net profit margin.” Investopedia defines it as a “ratio of net profits to revenues.” A net profit margin measures the company’s financial stability. It may look simple on the outside, but the process of determining the net profit margin is quite tedious and enervate. So, to help you calculate it with ease, we have provided a list of templates and a step-by-step guideline that you can possibly use in the process of drafting your financial statements. See what benefits you can get from this post as you scroll it down.
10+ Net Profit Margin Templates in Google Docs | Word | Pages | AI | PDF | Excel
1. Income Statement Template
One aspect of determining your net profit margin is making a simple income statement. Hence, this Income Statement Template can be of great help to you. There’s no problem modifying it in Google Docs, MS Word, and Apple Pages because the template is made easily editable. Download it immediately to start the editing process!
2. Quarterly Business Report Template
This Quarterly Business Report Template is a useful tool in preparing a quarterly financial report for your business. Aside from that, the data that you’ll be providing can be used for future purposes, primarily when you are tasked to establish a net profit margin. If you’re interested, you may secure a copy of this template anytime you need it.
3. Weekly Sales Report Template
Get to create a detailed weekly sales report with the help of our ready-made Weekly Sales Report Template. The template comes with the original content that you can easily modify in Google Docs, MS Word, and Pages file formats. Need a template like this one today? Download it now!
5 Steps to Determine a Net Profit Margin
Step 1: Comprehend the Net Profit Margin
Understanding the net profit margin is pretty straightforward, but carrying out the whole process is another story. For small businesses, keeping track of the net profit margin can help them assess the effectivity of the current plans of action. And in most cases, it is of essential relevance in their financial analysis. Along with the gross profit margin and operating profit margin, a net profit margin is also a vital indicator to monitor your company’s economic progress.
Step 2: Prepare an Income Statement
Remember that you can only find the company’s net profit margin at the bottom of your income statement. Your business has to prepare a financial document, like an income statement, to record and monitor the expenses and profits. After a quarter, a month, or a year of generating profits, you need to go through the process of putting it all in one document. Hence, developing an income statement is one way to determine the net profit margin of your business. And if ever you need a template to help you draft a well-layout income statement, you can always go online and download an income statement template from our website. Each model comes with the original content that you can make use of, so there’s no problem modifying it according to your preferences.
Step 3: Identify the Net Income
In identifying the net income in a given period, you need to subtract the cost of the goods sold (COGS), the operating and other expenses, the interests, and the taxes from your business’s revenue example. After subtracting all these expenses, the total sales are your net incomes or profits, which is to be divided over your revenue. To clearly understand the process, it generally follows this simple formula: R – COGS – E – I – T = Net Income. Where, R = Revenue; COGS = Cost of Goods Sold; E = Operating and Other Expenses; I = Interests; and T = Taxes
Step 4: Follow the Net Profit Margin Formula
When you have identified the net income of your business already, the next step is to learn the process of getting a net profit margin. The formula is just as simple as dividing the net sales from the net income. That is net income / net sales x 100 = net profit margin.
Net sales are your business’s total revenue. In order for you to determine the net sales, you only have to subtract your income or revenue with sales discounts, rebates or allowances, and sales returns. You can also find it in your income statement.
Step 5: Calculate the Net Profit Margin
They said that the only way to understand it is when you can explain the term using a good case in point. With that, consider the following example:
Your shoe business makes $30, 000 in sales. In the process of producing your products, it costs you $15, 000. And you spent another $5, 000 for operating costs, such as interests and taxes.
Following the formula in computing your net income, which is the total sales – (COGS + taxes) = net income, the calculation goes like this: $30, 000 – $15, 000 + $5, 000 = $10, 000.
And in determining your net profit margin, you need to follow this formula: net income / net sales = net profit margin. That is, $10, 000 / $30, 000 = 0.333 x 100 = 33.3%. Therefore, your net profit margin is 33.3%. In short, 33.3% of your total sales revenue is your business profit.
4. Monthly Sales Report Template
Use this Monthly Sales Report Template to draft an impressive monthly sales report. You’ll get more than just a guide in this template, but more importantly, the ready-made layout and the original content. Make no doubts about getting this template today. Download it now to start the editing activity!
5. General Income Statement Template
Like any other income statement templates, this General Income Statement Template is easily editable and 100% customizable in all versions of MS Word and Pages. Whether you are at home or in the office, you can modify the template anytime you want. So, don’t waste much of your time. Download it right there and then!
6. Monthly Financial Management Report Template
Financial management reports help every business assess and monitor their company’s economic progress every month. By using our Monthly Financial Management Report Template, drafting a financial management report has never been this simple and quick. The template can surely save you from too much stress and the hassle of making a financial report from scratch. If you need this template now, you can download it right away.
7. Free Monthly Report Template
Make your monthly report more resounding and convincing with the help of our ready-made and print-ready Free Monthly Report Template. This template is made available in A4 and US print sizes, perfect for a commercial as well as personal printing. Stop staring at your screen. Secure a copy today!
8. Free Sales Report Template
Draft a personalized sales report now with ease using this Free Sales Report Template. Record your business sales trouble-free and error-free in this template. It saves not just your money but also your valuable time. You can access and customize it in Illustrator file format. What are you waiting for? Download it now for free!
9. Free Annual Report Template
Are you looking for a free template to help you draft an annual report? Why not try our Free Annual Report Template today? This template makes use of the layout and the content that you can either use your advantage or change using Illustrator, MS Word, and Pages file formats. Make haste! Download the template instantly!
10. Income Statement Example
Allow this Income Statement Example to guide you in the layout of your income statement. Income statements are financial documents that are mainly relevant in identifying your business’s net profit margin. Hence, this file can surely help you in the whole manual process. Secure a copy in a Portable Document Format (PDF) now!
11. Monthly Sales Report Sample
Use this Monthly Sales Report Sample to help you draft a monthly sales report today. You can get a copy of this file easily and access it in a Portable Document Format (PDF). To start out, just click the download button.