Net margin is the percentage of revenue that remains as profit after all expenses, including production costs, operating costs, interest, and taxes. It is the bottom-line profitability metric showing how much of each sales dollar becomes actual profit.
A company generates $100 million in revenue and has total expenses of $85 million, including all operating costs, interest, and taxes. Its net income is $15 million, giving it a 15 percent net margin. This means the company keeps 15 cents as profit for every dollar of sales.
Greater Fool is a free Chrome extension that explains terms like this in place. Highlight a word on any page, click Explain, keep reading.
Add to Chrome (free)