Calculate the fixed costs incurred by the company. They would include salaries, interest payments, maintenance etc.


Let's say the total of all these would be equal to $1500 in the above example.
 Net profit is the final profit which the company makes after deducting all the costs from the total sales. If this number is negative, it implies that the company is making losses and its cost price is more than the selling price.


Net profit for the above example would be $2500 - $1500 = $1000.
 It is the ratio of Net profit / Total sales which in the above example would be equal to $1000 / $5000 = 20%.
Find your Fixed Costs.
Calculate Net Profit.
Find your Net Profit Margin.
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