Net profit margin: definition, example, and why it matters
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.
- Short definition. Net profit as a percentage of revenue.
- Category. Net profit margin is a accounting term used by service businesses when billing customers.
- How Glo Invoice handles it. Glo Invoice builds net profit margin into the invoice itself, so you don't track it on paper or in a spreadsheet.
Frequently asked questions
What does net profit margin mean?
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.
