Net Margin
Also known as Net Profit Margin. Calculated as ratio of Net Income divided by Total Revenue. For a company, Net Margin is lower than the Gross Margin and the Operating Margin. Net Income and Total Revenue can be found by looking at any company's income statement.For an application of operating, net, and gross margins to evaluate a company's business performance, please look at our HP case. This case illustrates that even though HP's gross margins are higher than Dell's, Dell is more operationally efficient, since its net and operating margins are higher than HP's.
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