Net Margin
The share of sales left as final profit after all costs (operating, interest, taxes).
In plain terms
Net margin looks at what percent of sales is the profit finally in hand after subtracting all costs — core-business costs of course, plus interest, taxes, and even one-off gains and losses all settled.
If operating margin is "what the core business kept," net margin is "what is truly left after everything is taken out." So it is usually lower than operating margin.
What it tells you
Net margin is the share of final profit that could actually flow back to shareholders. Because EPS, PER, and ROE are all computed from this net income, net margin is the starting point for the other profitability metrics.
Looking at the gap between operating margin and net margin lets you gauge how much interest (debt burden), taxes, and non-core gains and losses ate into or added to profit.
Formula
net margin = net income ÷ revenue × 100
What high or low means
A higher net margin means a structure where sales carry through well to final profit.
If operating margin is fine but net margin is unusually low, it can signal heavy interest costs (debt burden) or large taxes or one-off losses.
Net income is the number most swayed by one-off items. Asset-sale gains, lawsuit settlements, tax refunds and the like — unrelated to the core business — can mix in and make a single quarter spike. So to see the strength of the core business look at operating margin, and for the trend look at several quarters together.
Taxes vary by country, period, and tax breaks, so a temporary change in tax rate alone can shift net margin.
If a high net margin came not from a better core business but from a one-time pop (e.g. a book gain on an asset held), it can disappear next quarter. So you have to look at "why it is high" too.
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see Net and other financial metrics alongside the sector average.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.