Glossary
Net Margin
Net income as a percentage of revenue — the bottom-line profitability headline.
Net Margin = Net Income / Revenue × 100%. It is the percentage of every sales dollar that flows through to bottom-line profit after all costs, interest, and taxes have been paid.
Net margin captures everything operating margin does, plus financing structure and tax efficiency. A heavily levered firm with the same operating margin as a debt-free peer will show a lower net margin because of interest expense.
It is the headline profitability figure in most earnings reports, but operating margin is usually more informative for comparing the underlying businesses across different capital structures and tax jurisdictions.