Net margin (profit margin) is net income divided by revenue — the bottom-line profitability after all expenses, interest, and taxes. A company with $10M revenue and $1.5M net income has 15% net margin. Compare across same industry — tech 20-30%, retailers 1-3%, restaurants 5-10%, banks 20-25%. Highly variable based on capital structure, tax jurisdiction, and one-time items. Operating margin is generally a cleaner business-quality metric because net income includes non-operating effects. Combine net margin with revenue growth — high margin × growing revenue × growing margin trend is the wealth-building combination investors seek.
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Net Margin
August 22, 2026 · Aditya Gupta
Accounting
Related terms
Accounts Payable
Accounts Payable (A/P) is money a company owes to suppliers for goods or services received but not yet…
Accounts Receivable
Accounts Receivable (A/R) is money owed to a company by customers for goods or services delivered on credit.…
Accrual Accounting
Accrual accounting recognizes revenues when earned (regardless of cash receipt) and expenses when incurred (regardless of cash payment)…
Accrued Expense
An accrued expense is a cost recognized in the income statement before cash is paid — recorded as…
Amortization
Amortization is the systematic allocation of intangible asset cost over its useful life — analogous to depreciation but…
Audit
An audit is an independent examination of a company's financial records, internal controls, and statements — typically conducted…
