GlossaryIntermediate
Net Margin
Net income divided by revenue, measuring a company's overall bottom-line profitability after every expense, including interest and taxes.
Net margin divides a company's net income (profit after every expense, including interest and taxes) by its total revenue, measuring overall bottom-line profitability — the final, most complete margin figure in the standard gross/operating/net comparison.
Because it includes financing costs and tax effects, net margin can differ meaningfully from operating margin for companies with different debt levels or tax situations, even if their core operations are equally profitable. See Kaavon's dedicated Net Margin article for the full calculation.
Examples
- Two companies with identical operating margins can have different net margins if one carries significantly more debt, due to the resulting difference in interest expense.
- Net margin is the final, most complete figure in the gross/operating/net margin sequence, reflecting every expense a company incurred.