how net margin differ from gross margin



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3 Answer(s)


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Net Margin is Gross Margin-Operating Expenses-Interest-Taxes. That is the final profit left over in a company that goes to the investors or the shareholders.

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Revenue - Cost of Goods sold = Gross Margin
Gross Margin - Operating Expense = Net Margin
Gross MArgin is the profits the company makes after you subtract the raw material cost from the revenue. For example while making pizza, ingredients like cheese, vegetables etc are raw materials.

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Net Margin is Gross Margin-Operating Expenses-Interest-Taxes. Would this mean that Net Margin = Net Income (going by the above definition)?

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