Net Margin
The share of revenue left as profit after every cost: production, operations, marketing, salaries, interest, and taxes. The bottom line.
Net margin = net profit / revenue
Why it matters
Net margin is the ultimate measure of whether a business makes money. Startups often run it negative on purpose while growing, but the path to a healthy net margin is what turns a startup into a durable company.
For example
After every cost, including salaries, marketing, interest, and tax, a company keeps 8 rupees of every 100 in revenue, an 8 percent net margin.
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Related terms
Also in Starting Up
See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.
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