- Financial Ratio (Profitability)
- Net Margin
General
Financial Ratio (Profitability)
Financial Ratio (Value)
Technical
Test & Review
Net Profit Margin
The Net Profit Margin is a measure of how much profit a company has left over after paying all of its expenses, including Interest and Taxes. It is calculated as the Net Profit divided by Revenue.
Formula of Net Profit Margin
Interpretation of Net Profit Margin
After all expenses, including taxes and interest costs, are paid, net profit is what is left for shareholders.
This is one of the best indicators of the company's efficiency because net profit takes into consideration all expenses of the company. Investors want the net profit margin to be as high as possible, and a double-digit net margin or higher is generally considered strong. That said, the most profitable businesses can have significantly higher net margins.
Average Net Profit Margin by Industry in United States
| Industry | Average Gross Profit Margin | Average Net Profit Margin | Number of companies |
|---|---|---|---|
| Advertising Agencies | 45.9% | -9.7% | 22 |
| Aerospace & Defense | 27.6% | 5.1% | 47 |
| Agricultural Inputs | 31.8% | 6.9% | 11 |
| Airlines | 48.1% | 1.2% | 13 |
| Apparel Manufacturing | 45.4% | 3.5% | 17 |
| Apparel Retail | 39.9% | 3.7% | 29 |
| Asset Management | 82.6% | 23.5% | 74 |
| Auto Manufacturers | 11.5% | 5.7% | 17 |
| Auto Parts | 21.8% | 1.7% | 45 |
| Auto & Truck Dealerships | 27.3% | 5.2% | 14 |
| Banks - Diversified | 88.7% | 26.3% | 6 |
| Banks - Regional | 99.8% | 27.7% | 278 |
| Beverages - Non-Alcoholic | 42.5% | 11.3% | 10 |
| Beverages - Wineries & Distilleries | 40.2% | 8.6% | 9 |
| Biotechnology | 86.2% | -266.5% | 517 |
| Broadcasting | 40.1% | -2.9% | 17 |
| Building Materials | 28.7% | 15% | 7 |
| Building Products & Equipment | 30.4% | 8.9% | 31 |
| Business Equipment & Supplies | 32.1% | 2.9% | 7 |
| Capital Markets | 84.5% | 12% | 32 |
| Chemicals | 18.7% | 5.5% | 17 |
| Coking Coal | 35.7% | N/A | 4 |
| Communication Equipment | 40.1% | -6.2% | 53 |
| Computer Hardware | 35.6% | -2.4% | 28 |
| Conglomerates | 29% | 1.8% | 11 |
| Consulting Services | 41.6% | 5.4% | 16 |
| Consumer Electronics | 29.2% | -12% | 12 |
| Credit Services | 84% | 22.4% | 44 |
| Department Stores | 33.4% | 2.9% | 5 |
| Diagnostics & Research | 46.1% | -117.6% | 68 |
| Discount Stores | 26% | 2.3% | 9 |
| Drug Manufacturers - General | 71.7% | 17.3% | 12 |
| Drug Manufacturers - Specialty & Generic | 48.5% | -104.6% | 52 |
| Education & Training Services | 52.1% | 5.2% | 16 |
| Electrical Equipment & Parts | 27.9% | 6% | 41 |
| Electronic Components | 31.3% | 3.4% | 29 |
| Electronic Gaming & Multimedia | 62.8% | -10.3% | 7 |
| Electronics & Computer Distribution | 18.9% | 2.1% | 6 |
| Engineering & Construction | 16.7% | 2.8% | 30 |
| Entertainment | 46.2% | -6.3% | 36 |
| Farm & Heavy Construction Machinery | 21.8% | 6.9% | 21 |
| Farm Products | 13.4% | 5.3% | 18 |
| Financial Data & Stock Exchanges | 70.5% | 27.7% | 10 |
| Food Distribution | 14.1% | 0.6% | 9 |
| Footwear & Accessories | 44.5% | 5.5% | 11 |
| Furnishings, Fixtures & Appliances | 35.4% | 3% | 19 |
| Gambling | 55.5% | 4.9% | 12 |
| Gold | 27.4% | 3.6% | 26 |
| Grocery Stores | 27.2% | 2% | 10 |
| Healthcare Plans | 18.8% | -13.5% | 12 |
| Health Information Services | 48.5% | -47.2% | 33 |
| Home Improvement Retail | 41.9% | 1.4% | 7 |
| Household & Personal Products | 54.8% | 5% | 24 |
| Industrial Distribution | 29.4% | 5.4% | 16 |
| Information Technology Services | 37.5% | 1% | 53 |
| Insurance Brokers | 89.2% | 6.6% | 12 |
| Insurance - Diversified | 62.4% | 10.7% | 11 |
| Insurance - Life | 59.9% | 10.9% | 16 |
| Insurance - Property & Casualty | 52.1% | 7.1% | 36 |
| Insurance - Specialty | 83.5% | 18.5% | 15 |
| Integrated Freight & Logistics | 36.6% | 4.5% | 15 |
| Internet Content & Information | 60.9% | -5.3% | 37 |
| Internet Retail | 45.4% | 0.7% | 22 |
| Leisure | 40.2% | -0.2% | 25 |
| Lodging | 33% | 8% | 9 |
| Luxury Goods | 45.2% | 4.8% | 5 |
| Marine Shipping | 47.6% | 6.2% | 23 |
| Medical Care Facilities | 34% | -29.2% | 39 |
| Medical Devices | 61.3% | -92.3% | 103 |
| Medical Distribution | 19.6% | 0% | 7 |
| Medical Instruments & Supplies | 52.5% | -72.1% | 44 |
| Metal Fabrication | 23.7% | 5.3% | 12 |
| Mortgage Finance | 92.1% | 17.3% | 17 |
| Oil & Gas Drilling | 37.7% | 15.1% | 6 |
| Oil & Gas E&P | 66% | 24.2% | 63 |
| Oil & Gas Equipment & Services | 26.4% | 3.3% | 43 |
| Oil & Gas Integrated | 30.5% | 10.9% | 7 |
| Oil & Gas Midstream | 49.4% | 19.9% | 36 |
| Oil & Gas Refining & Marketing | 11.3% | 0.7% | 18 |
| Other Industrial Metals & Mining | 23.4% | 0.5% | 13 |
| Other Precious Metals & Mining | 29.4% | N/A | 11 |
| Packaged Foods | 26.6% | 4.4% | 41 |
| Packaging & Containers | 24.9% | 3.2% | 22 |
| Paper & Paper Products | 14% | -4% | 5 |
| Personal Services | 41.7% | 6.4% | 11 |
| Pharmaceutical Retailers | 40.2% | -24.2% | 8 |
| Pollution & Treatment Controls | 32.4% | 5.2% | 7 |
| Publishing | 59.1% | 5.4% | 7 |
| Railroads | 34.7% | 8.4% | 8 |
| Real Estate - Development | 39.2% | 11% | 10 |
| Real Estate - Diversified | 24.2% | N/A | 4 |
| Real Estate Services | 38.4% | 1.2% | 24 |
| Recreational Vehicles | 21.9% | 6.1% | 15 |
| REIT - Diversified | 68.6% | 16.5% | 18 |
| REIT - Healthcare Facilities | 71% | 8.6% | 16 |
| REIT - Hotel & Motel | 43% | 5.4% | 15 |
| REIT - Industrial | 72.7% | 25.7% | 16 |
| REIT - Mortgage | 92.2% | 24.8% | 35 |
| REIT - Office | 62.7% | -4.6% | 24 |
| REIT - Residential | 58.3% | 15.5% | 18 |
| REIT - Retail | 72.1% | 21.9% | 21 |
| REIT - Specialty | 55.7% | 9.4% | 15 |
| Rental & Leasing Services | 44.5% | 11.8% | 20 |
| Residential Construction | 24.4% | 11% | 21 |
| Resorts & Casinos | 50.3% | 4.7% | 19 |
| Restaurants | 39.5% | 6% | 41 |
| Scientific & Technical Instruments | 43.1% | 1.2% | 24 |
| Security & Protection Services | 38% | 4.9% | 14 |
| Semiconductor Equipment & Materials | 47.6% | 9.2% | 26 |
| Semiconductors | 43.5% | -4.3% | 64 |
| Software - Application | 62.5% | -10% | 190 |
| Software - Infrastructure | 63.1% | -5% | 87 |
| Solar | 24.8% | -15.4% | 13 |
| Specialty Business Services | 29% | 4.1% | 26 |
| Specialty Chemicals | 26.6% | 5.9% | 46 |
| Specialty Industrial Machinery | 34.3% | 9% | 73 |
| Specialty Retail | 37.5% | 1% | 42 |
| Staffing & Employment Services | 34.2% | 4.1% | 23 |
| Steel | 16.8% | 4.1% | 15 |
| Telecom Services | 58.5% | 3.3% | 33 |
| Textile Manufacturing | 18% | -4.3% | 4 |
| Thermal Coal | 38% | 28% | 9 |
| Tobacco | 39% | 8.4% | 6 |
| Tools & Accessories | 34% | 7% | 11 |
| Travel Services | 53.9% | 3.6% | 14 |
| Trucking | 49.9% | 6.5% | 12 |
| Uranium | 21.4% | N/A | 4 |
| Utilities - Diversified | 37.6% | 12.5% | 15 |
| Utilities - Regulated Electric | 36.1% | 10.5% | 25 |
| Utilities - Regulated Gas | 39.7% | 10.7% | 13 |
| Utilities - Regulated Water | 50.5% | 16.4% | 12 |
| Utilities - Renewable | 35% | 6% | 12 |
| Waste Management | 29% | 2.7% | 11 |