What is net margin?Net Margin
Net income ÷ revenue: how much of each $1 of revenue ends up as profit.
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- Fundamental AnalysisThe Income Statement: How the Money Is Made
Start from revenue and peel away costs, expenses, interest and taxes layer by layer. What's left at the end is net income.
- Fundamental AnalysisROE and DuPont Analysis
Three companies can all have a 15% ROE: one through high margins, one by selling fast, one by borrowing. DuPont analysis splits ROE into three parts to show how a company makes money and the risks behind it.
Related terms
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Go to “The Income Statement: How the Money Is Made”