What Is Net Margin Ratio Accounting? A Forex Trading Guide

5 min read

Net margin ratio is a calculation used in accounting and finance to measure a company’s profitability. It is calculated by dividing a company’s net income after taxes by its total sales revenue. This ratio measures how much of each dollar earned by the company is left after paying taxes and operating costs. A higher net margin ratio indicates a more profitable company, generally. This metric is a key indicator of a company’s overall financial health and performance.