Net Margins financial definition of Net Margins. Net Margins finance term by the Free Online Dictionary.

Profit margin

Indicator of profitability. The ratio of earnings available to stockholders to net sales. Determined by dividing net income by revenue for the same 12-month period. Result is shown as a percentage. Also known as net profit margin.

Profit Margin

A measure of how well a company controls its costs. It is calculated by dividing a company's profit by its revenues and expressing the result as a percentage. The higher the profit margin is, the better the company is thought to control costs. Investors use the profit margin to compare companies in the same industry and well as between industries to determine which are the most profitable.

profit margin

1. The relationship of gross profits to net sales in a business. Net sales are determined by subtracting returns and allowances from gross sales, whereupon the cost of goods sold is then subtracted from net sales to obtain gross profit. Gross profit is divided by net sales to obtain the profit margin

an excellent indicator of a firm's operating efficiency, its pricing policies, and its ability to remain competitive. See also gross profit margin.

2. Net profit margin of a business, which is calculated by deducting operating expenses and cost of goods sold and dividing the result by net sales. This term is less often used to indicate net profit margin.

Profit margin. A company's profit margin is derived by dividing its net earnings, after taxes, by its gross earnings minus certain expenses. Profit margin is a way of measuring how well a company is doing, regardless of size.

For example, a $50 million company with net earnings of $10 million and a $5 billion company with net earnings of $1 billion both have profit margins of 20%.

Profit margins can vary greatly from one industry to another, so it can be difficult to make valid comparisons among companies unless they are in the same sector of the economy.

profit margin

The difference between the cost of a unit (house,subdivision parcel,condominium) including a pro rata share of all overhead and other such expenses, as compared to the sales price for that unit.

Profit Margin

What Does Profit Margin Mean?

A ratio of profitability calculated as net income divided by revenues or net profits divided by sales. It measures the dollar amount of the sales that a company actually retains in earnings. Profit margin is very useful in comparing companies in similar industries. A higher profit margin indicates a more profitable company. Profit margin is displayed as a percentage; a 20% profit margin, for example, means that the company has a net income of $0.20 for each dollar of sales.

Investopedia explains Profit Margin

A company's earnings do not always tell the entire story. Increased earnings are good, but an increase does not mean that the profit margin of a company is improving. For instance, if a company's costs are rising at a faster pace than are sales, this will lead to a lower profit margin, indicating that the company should rein in its costs. Consider a company that has net income of $10 million from sales of $100 million, giving it a profit margin of 10% ($10 million/$100 million). If in the next year net income rises to $15 million on sales of $200 million, the company's profit margin will fall to 7.5%. Although the company has increased its net income, it has done so with diminishing profit margins.

Related Terms:
• Gross Margin
• Net Income—NI
• Operating Margin
• Profitability Ratios
• Revenue

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After-Tax Profit Margin Average Profit Margin Effective Margin Gross Margin Gross Profit Margin Margen de ganancia Margin of Profit Net Margin Net Operating Margin Net Profit Margin Operating Margin Operating Profit Margin Private Branding Product Mix Profitability Ratio Profitability Ratios Real Profit Return on Sales Sales Mix	Much of the year-over-year margin expansion is due to the Financials, were the whole concept of revenues is a bit different from most companies, and thus the concept of net margins is also a bit different. Zacks Earnings Trends Highlights: Alcoa, Intel and J.P. Morgan by PR Newswire Net margins for the Top 100 were up 30 percent, to $3. $122 billion in '08 sales sets record for top 100 by Chesnick, David / Rural Cooperatives As part of its scrutiny of prices in the sector, the regulator said firms' net margins had increased since last November on the typical standard tariff bill as the market price companies pay for the energy has fallen. Energy firms are widening margins by Daily Post (Liverpool, England)	Net Debt to Assessed Valuation Net Debt to Estimated Valuation Net Domestic Product Net Earnings Net Errors and Omissions Net exposed assets Net Financing Cost Net Float net income net income figures Net Income per Share Net Income per Share of Common Stock Net Interest Cost Net Interest Margin Net Interest Margin Security Net Investment Net Investment Income Net Investment Income per Share Net Jumping net lease Net Liquid Assets net listing Net Long Net Loss Net Margin Net Margins Net monetary assets net operating income Net Operating Loss Net Operating Loss Carrybacks Net Operating Loss Carryforwards Net Operating Losses Net Operating Margin Net Operating Profit after Tax Net Operating Profit Less Adjusted Taxes Net parity Net Period Net Plant and Equipment Net Position net present value Net Present Value of Future Investments Net present value of growth opportunities Net Present Value Rule Net Proceeds Net Profit Net Profit Margin Net Quick Assets Net Realizable Value Net Realized Capital Gains Per Share Net Receivables net return rate	Net lag Net lag Net lag NET language NET language Net Laying Ship Net Leasable Area Net lease Net Lease Capital Advisors Net Lease Forum Net Leases Net Leasing Advantage net line net line Net Liquid Assets net listing net load net load capacity Net Locomotive Energy Cost Net Long Net Long Wave Radiation Surface Net Long-Term Capital Gains Net Long-Term Capital Loss Net Loss Net Loss Net Losses Net Losses Net Manager Net margin Net margin Net Margins Net Market Makers Net MD Net MD Net Mean Discharge Rate net melon Net Merging Advantage Net metering net mixing water Net monetary assets Net Monstrous Compendium Net nanny Net Nanny Software International Inc Net National Disposable Income Net National Product Net National Product net national products Net National Welfare Net Nearest Neighbor Analysis Net Negative Producing Programmer Net neutrality Net neutrality Net New Assets Net New Money Net news Net news Net News Daily Net News Metadata Protocol Net News Now

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After-Tax Profit Margin
Average Profit Margin
Effective Margin
Gross Margin
Gross Profit Margin
Margen de ganancia
Margin of Profit
Net Margin
Net Operating Margin
Net Profit Margin
Operating Margin
Operating Profit Margin
Private Branding
Product Mix
Profitability Ratio
Profitability Ratios
Real Profit
Return on Sales
Sales Mix

Much of the year-over-year margin expansion is due to the Financials, were the whole concept of revenues is a bit different from most companies, and thus the concept of net margins is also a bit different.

Zacks Earnings Trends Highlights: Alcoa, Intel and J.P. Morgan by PR Newswire

Net margins for the Top 100 were up 30 percent, to $3.

$122 billion in '08 sales sets record for top 100 by Chesnick, David / Rural Cooperatives

As part of its scrutiny of prices in the sector, the regulator said firms' net margins had increased since last November on the typical standard tariff bill as the market price companies pay for the energy has fallen.

Energy firms are widening margins by Daily Post (Liverpool, England)

Net Debt to Assessed Valuation

Net Debt to Estimated Valuation

Net Domestic Product

Net Earnings

Net Errors and Omissions