Net margin

Also called: profit margin

The share of each sale that ends up as profit for shareholders after every cost, interest and tax.

Formula

Net margin = Net income ÷ Revenue

Worked example

1. Net income = $1.5bn
2. Revenue = $10.0bn
3. $1.5bn ÷ $10.0bn

Result: 15.0%

How to read it

Can be distorted by one-off items, so look at several years.

Worked example uses made-up figures for 'Example plc'

See it with real numbers: Any company page → (free account)