If you are not from the medical industry, just ignore MR expenses.

Once you have calculated your net profit, you can easily find out your profit margin using our net profit margin calculator below. This will help you understand how much profit you’re making from your total revenue.

Let’s understand each terms one by one

Sale Value

If you want to know what does sale value mean in pharma franchise, then you can understand it this way that it is the total money you make by selling your pharma products.

For example, let’s say you sell a medicine packet to a chemist or hospital for ₹10,000. This ₹10,000 is the amount you pocket before deducting any expenses. This does not include your profit yet – it is just your total sales. So, this is the starting point to calculate how much money your business is making before deducting costs like procurement, travel or marketing.

Purchase Value

and now understand what purchase value means; just think when we understand about Sale value we supposed that you sell a medicine packet to a chemist or hospital for ₹10,000. Let’s say you bought that packet in ₹6,000 from the company — that ₹6,000 is your purchase value.

This is your main cost because without buying the products you cannot sell them. So basically this is the amount you buy the products from the company so that you can further sell that product to hospitals chemists. So it is very important to know your purchase price, as it has a huge impact on your profit margin.

MR Expenses

If you are in the medical industry, you know very well who an MR is. MR stands for Medical Representative — the person who visits doctors, chemists, and hospitals to promote your products and generate prescriptions (for more information about MR, you can read our this blog “Medical Representative“.

Now, MR Expense simply means the money you spend on that representative. And this expense can include the salary of the MR, incentives, travel allowance, mobile bills, or even food expenses. Basically, it is everything you pay to keep your MRs active and motivated so that your MR can deliver better results. Since they play a big role in determining and selling your products, it is an important part of your business expenses.

Travel Expenses

If medical professionals or pharma franchise owners like you already know, MR will often travel to meet doctors, visit chemists, or attend medical camps and events. The money spent on transport, fuel, train or bus tickets, tolls, or even local travel falls under Travel Expense. It’s basically the cost of moving around for business purposes.

These visits are important because they help build strong relationships and increase sales. So, every time you or your team travels for work, that cost should be noted as a travel expense—it may seem small, but it adds up over time and affects your profit.

Marketing Expenses

One thing you know very, very well, if anyone is serious about growing their pharma business, then how important marketing is. Marketing Expense means the money you spend to promote your products and brand. This can include visual aids, product brochures, doctor samples, promotional gifts (like pens or notepads), banners, standees, and even online promotions if you do any.

These tools help you and your MR create a strong impression and convince doctors or chemists to choose your brand. So, every rupee spent to spread the word about your products comes under marketing expense, and it plays a key role in boosting your sales.

Other Expenses

Are you confused about what Other Expenses means? These are the smaller expenses after travel and marketing expenses, which are of many different types.

This can include things like rent, internet bills, packaging, courier charges, electricity, stationery or minor repairs.Basically, any expense that is necessary to run your business smoothly but is not directly a part of the purchase or promotion of products falls under this category. These expenses may seem small to you but when you calculate them, they seem to affect your profits. Hence, it is important to take them into account while calculating your overall business expenses.

Some examples of other expenses

• Office rent
• Electricity bill
• Internet charges
• Stationery
• Courier charges
• Packaging materials
• Staff salary

Add all the other expenses and then put it in the calculator.

Net Profit

Net profit is the final amount you actually earn from your pharma franchise business after removing all your expenses. It tells you how much is left in your hand once you’ve paid for your products, marketing, travel, and all other costs. This is the number that shows your true income.

Formula:
Net Profit = Sales Value – (Purchase Value + MR Expense + Travel Expense + Marketing Expense + Other Expense)

Let’s understand it with an example:

• Sales Value = ₹10,000
• Purchase Value = ₹6,000
• MR Expense = ₹800
• Travel Expense = ₹500
• Marketing Expense = ₹1,200
• Other Expense = ₹300

Formula (used in net profit margin Calculator):

Net Profit = ₹10,000 – (₹6,000 + ₹800 + ₹500 + ₹1,200 + ₹300)
Net Profit = ₹10,000 – ₹8,800
Net Profit = ₹1,200

So, your actual profit at the end  is ₹1,200.

And you don’t need to make that type of calculation; You just need to use our profit calculator & profit margin calculator, which makes it easy and time-saving for you.

Net Profit margin

Once you know your net profit, the next smart step is to understand your Net Profit Margin. It tells you how much profit you’re making on every ₹100 of sales, after covering all your expenses. It’s shown in percentage, so it’s super useful for comparing how well your business is performing over time or against others. A higher margin means you’re running your business more efficiently and keeping more profit from your sales.

Formula:
Net Profit Margin = (Net Profit / Sales Value) × 100

Example (Extention of previous scenario):

From before, we had:

• Sales Value = ₹10,000
• Net Profit = ₹1,200

Now use the formula:

Net Profit Margin = (₹1,200 / ₹10,000) × 100
Net Profit Margin = 0.12 × 100 = 12%

So, your net profit margin is 12%—meaning you earned ₹12 profit for every ₹100 you sold. And for this, you also can’t solve these type of complex things; you only need to use our net profit calculator & profit margin calculator, which makes easy calculations for you.

Use these net profit & profit margin calculator  for another business

If you’re not from the medical or pharma field, no worries — you can still use our net profit calculator & net profit margin calculator. Just leave the MR Expense field blank or enter ₹0. The rest of the fields like Sales, Purchase, Travel, Marketing, and Other Expenses, apply to any business, helping you calculate accurate net profit and net profit margin.

Want to Maximize Your Profits? Let’s Grow Your Pharma Business Together

Running a pharma franchise can be tough — but with the right partner, it becomes profitable and smooth. At India Pharma Franchise, we’re here to support your growth with quality products, marketing help, and complete business guidance.

Here’s how we help you grow:

• High-margin, quality pharma products
• Free promotional support & tools
• Personal guidance & franchise setup help
• 100% transparent business policy

Let’s take your pharma business to the next level — together.