Profit Margin
Fundamental Analysis
Definition
A profitability ratio measuring what percentage of revenue becomes profit, calculated as net income divided by revenue, indicating a company's efficiency in converting sales into actual profit.
Key Points
- Net profit margin = Net Income / Revenue
- Higher margins indicate pricing power
- Varies significantly by industry
Examples
Tech companies often have 20%+ marginsRetail margins typically under 10%Quick Info
Category
Fundamental Analysis
Related Topics
profitability ratios
operating efficiency
competitive advantage
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