Net Margin

Net Margin is the percentage of revenue a company keeps as profit after paying all its expenses. It's calculated by dividing net income (what's left after taxes and costs) by total revenue, then multiplying by 100. You'll see this metric in financial statements and analyst reports because it shows how efficiently a company turns sales into actual profit. A higher net margin means the company is better at controlling costs and keeping more money from each dollar earned. For example, if Company ABC generates $100 million in sales but only keeps $15 million as profit, its net margin is 15%—meaning it's more profitable than a competitor with a 10% net margin, all else equal.