2 min read
Definition
Net margin is net profit divided by revenue, expressed as a percentage. It shows the proportion of each pound of sales that survives all costs — including overheads, interest and tax — to become profit.
In plain terms
Sell £100 and keep £8 after everything, and your net margin is 8%. It's the truest measure of how profitable your trading really is.
Why it matters for your company
Thin or falling net margins worry lenders and leave little room to service debt. Understanding your margin is core to affordability. See how lenders read your accounts.
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