Net profit margin is the percentage of revenue that remains as profit after all expenses — cost of goods sold, operating expenses, interest, taxes, and all other charges. It is the bottom-line profitability measure, dividing net income by revenue. A 15% net margin means the company keeps 15 cents of every dollar of revenue as profit.
Net Profit Margin = Net Income (TTM) / Revenue (TTM)
GeminIQ divides TTM net income by TTM revenue, both from SEC filings.
A: Software: 20-35%. Financials: 20-35%. Consumer staples: 8-15%. Retail: 2-5%. Margins below 5% are considered thin and leave little room for error. The most meaningful comparison is against direct industry peers.
A: Interest expense (from debt), income taxes, and non-operating items (like gains/losses on investments) separate operating margin from net margin. A company with high leverage will have a significantly lower net margin than operating margin because interest expense is a large charge.
A: Net income definitions can vary — some platforms use income from continuing operations, others use total net income including discontinued operations and extraordinary items. GeminIQ uses the total Net Income figure from the filing.