Accounting

    Net profit margin

    Net profit as a percentage of revenue.

    Definition

    Net margin = net profit ÷ revenue. Healthy small-trade net margin: 10–20%. Less than 5% means it's time to raise prices or cut overhead.

    Related terms

    Gross margin

    Profit as a percentage of the sell price (price − cost) ÷ price.

    Profit & loss (P&L)

    A statement summarizing revenue minus expenses over a period.

    Revenue

    Total money earned from sales before any expenses are subtracted.