2 min read
Definition
Net margin is net profit divided by revenue, expressed as a percentage. A 10% net margin means the business keeps 10p of profit from every pound of sales after all costs — a core measure of profitability and pricing power.
Why it matters
Margin, not turnover, determines how much cash sales actually produce — and therefore true affordability. A thin margin on high turnover can still mean little borrowing capacity. See turnover-based lending.
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