What Is Net Margin?
Net Profit divided by Net revenues, often expressed as a percentage. This number is an indication of how effective a company is at cost control. The higher the net margin is, the more effective the company is at converting revenue into actual profit. The net margin is a good way of comparing companies in the same industry, since such companies are generally subject to similar business conditions. However, the net margins are also a good way to compare companies in different industries in order to gauge which industries are relatively more profitable. It is also most important for shareholders as well as new investors who wants to invest in the company. Net profit is also good for Image making in the market because lendor, creditors and Bank first look on company net Margin. also called net profit margin.
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