Net margin is a financial term that measures how much profit a company earns per dollar of sales. It is therefore a measure of the company’s profitability. Net margin is thus an indicator of how efficiently a company generates profit relative to its sales.
A high net margin means the company earns a lot of profit per pound of sales, which is usually considered a sign of an efficient cost structure and a profitable business model. A low net margin indicates that the company has high costs or low sales, which may signal difficulties in remaining profitable in the long term. The formula for calculating net margin is:
Profit after financial items / net sales
EBITDA / -{3000-3799}
The formula in Boardeaser:
R12 / R1Net margin is an important indicator of a company's profitability, which is an important factor for investors to consider when deciding whether to invest.