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Finance

Net Margin

Also known as net profit margin, bottom line

The percentage of revenue you actually keep after every single cost, including tax and interest. The true bottom line.

Example

Earning ₹50L and keeping ₹4L after everything is an 8% net margin.

Formula

Net Margin = Net Profit ÷ Revenue × 100

Related terms

P&L
A summary of your income and expenses over a period that shows whether you made a profit or a loss. Also called the income statement.
Gross Margin
The share of each sale left over after the direct cost of making it — before overheads. Higher margins give you more room to grow.
Operating Margin
What percentage of revenue is left after paying both the cost of the product and the cost of running the business.

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