Investing Dictionary
Company Health

What is Profit Margin?

What percentage of revenue becomes actual profit

Full Explanation

If a company makes $100 in revenue but only keeps $20 after costs, its profit margin is 20%. Higher margins = more efficient business.

Real-World Example

Large tech companies often run 20–30%+ net margins — exceptional compared to most industries.

Related Company Health Terms

Operating Income

Profit from the core business before taxes and interest

P/E Ratio

How expensive a stock is compared to its profits

Price-to-Book (P/B)

Stock price vs. the company's net assets

Price-to-Sales (P/S)

How much investors pay for each dollar of a company's revenue

View all Company Health terms →

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