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Net margin

Net profit margin

Description

Net margin, sometimes known as net profit margin, is an important profitability ratio. Mostly it is expressed as a percentage and indicates how much net income a company earns from each dollar of sales. Data to calculate this ratio is collected from the income statement.

Norms and limitations

There are no general norms for this ratio.

Even in the same industry companies with the different values of this ratio can be observed. It happens because net margin depends on a wide range of factors.

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