Bottom-line profit as a percentage of revenue, after all costs.
Net margin is what actually remains. Typical figures vary hugely by industry — grocery runs 1–3%, software can exceed 20% — so compare within an industry, never across.
Formula: NM = Net Income ÷ Revenue × 100
Example: $62,000 profit on $500,000 revenue = 12.4%.
FAQ
What is Net Margin in simple terms?
Net margin is what actually remains. Typical figures vary hugely by industry — grocery runs 1–3%, software can exceed 20% — so compare within an industry, never across.
How is it calculated?
NM = Net Income ÷ Revenue × 100. Example: $62,000 profit on $500,000 revenue = 12.4%.