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Updated 1mo ago.
Updated 1mo ago.
Net margin = net earnings ÷ revenue. Percentage of revenue that becomes profit for shareholders, after interest, tax, and all other costs. A net margin above 20% is exceptional (Apple, Microsoft); 5–10% is typical for most sectors. Affected by tax, so varies by country.
A company sells $1B and keeps $100M net profit after EVERYTHING (production, overhead, interest, taxes). Its net margin is 10% — it keeps 10¢ per dollar of sales.
It's the bottom-line profitability, what actually flows to shareholders. A high, stable net margin signals quality. But it varies hugely by sector: compare a bank to a bank, not to a grocer.