Net Profit Margin
Percentage of revenue that becomes net income after all expenses.
Definition
Net profit margin represents the bottom-line profitability after all expenses, interest, taxes, and other costs are deducted from revenue. It shows how much of each revenue dollar the company keeps as profit.
Formula
Net Margin = Net Income / Revenue × 100
Why It Matters
Comparing net margins across competitors reveals which companies have sustainable cost advantages. Banks typically have net margins of 25-35%, while payment processors can achieve 40%+ due to their capital-light models.