Accounting Net Profit Margin (Per-Unit) Calculator
Calculate net profit and net profit margin for each unit sold using per-unit revenue, costs, expenses and taxes.
Overview
This per-unit net profit margin calculator estimates the amount and percentage of net profit earned on each unit sold. Enter the unit selling price together with direct costs, allocated operating expenses, other expenses and income tax.
How it works
The calculator subtracts all entered per-unit expenses from the selling price to find net profit per unit. It then divides net profit by the selling price and multiplies by 100 to calculate net profit margin. A positive margin means the unit contributes a net profit under the assumptions entered, while a negative margin indicates a per-unit loss.
How to use this calculator
- 1Enter the net selling price received for one unit.
- 2Add the cost of goods sold for that unit.
- 3Enter operating expenses allocated to each unit.
- 4Include per-unit interest, other expenses and income tax where relevant.
- 5Review the net profit per unit and net profit margin.
Example Calculation
Selling price per unit
$100
Cost of goods sold per unit
$45
Operating expenses per unit
$20
Interest and other expenses per unit
$2
Income tax per unit
$6
Net profit per unit
$27.00
With total expenses of 73 per unit, net profit is 27 per unit and the net profit margin is 27.00%.
Frequently asked questions
What is net profit margin per unit?
Net profit margin per unit is the percentage of a unit's net sales revenue that remains after all costs, operating expenses, other expenses and income tax allocated to that unit are deducted.
How do you calculate net profit per unit?
Subtract total per-unit expenses from the net selling price per unit. Total expenses can include cost of goods sold, operating expenses, interest, other expenses and income tax.
What is the formula for net profit margin?
Net profit margin equals net profit per unit divided by net selling price per unit, multiplied by 100.
Should sales tax be included in the selling price?
Usually no. Sales taxes collected for a tax authority are generally not business revenue, so use the net selling price excluding those taxes.
Why is overhead included per unit?
Allocating overhead helps show whether a unit is profitable after its share of indirect business costs, such as rent, administration and marketing.
Can net profit margin be negative?
Yes. A negative result means the entered total expenses are greater than the selling price for each unit.
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Assumptions and warnings
Assumptions
- All entered amounts relate to one comparable unit sold.
- Selling price is net of sales taxes, refunds, discounts and returns unless you include them in the amount entered.
- Costs and expenses are allocated to each unit using a method that is appropriate for your business.
- The result is an estimate and does not replace a full income statement or financial review.
Warnings
- This calculator provides an estimate only and is not accounting, tax or financial advice.
- Actual profit can differ because of volume changes, inventory valuation, returns, overhead allocation and tax treatment.