what is meaning of net margin and how it will affect in a company


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Lets take an example of the car company Honda. Whatever expense is incurred to the spare parts needed to make the car - engine, tires, steel, locks, windhsield, wipers etc are termed as Gross margin.

Other expenses that are not directly related to the car like salaries, rent, marketing expense, etc are operating expenses. So

Revenue - COGS = Gross Margin
Gross Margin - Opex = Net Margin

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