What is net margin? Formula, ranges and example
What is net margin?
Net margin measures net profit relative to revenue. Divide net profit by revenue for the same period and multiply by 100 to express it as a percentage. Hachiquant prioritizes profit attributable to owners of the parent.
Formula
Net margin (%) = net profit ÷ revenue × 100
- Net profit uses net_income_to_owners first, falling back to net_income when no owners split is reported.
- The canonical revenue key is net_sales. Match the period, accounting standard, consolidation scope and currency of the inputs.
- Missing inputs or zero revenue make net margin unavailable, not zero.
- The API returns net_margin as a fraction: 0.1 = 10%. The sign interpretations below apply when revenue is positive.
Ranges and interpretation
| Range | Interpretation |
|---|---|
| <0% | A net loss when revenue is positive. |
| 0% | Net break-even when revenue is positive, not zero operating profit or cash flow. |
| >0% | A net profit when revenue is positive, not a universal healthy threshold. |
Worked example from a filing
Year ended March 31, 2026 (–)
IFRS · Consolidated · JPY
| Input | JPY million |
|---|---|
| Profit attributable to owners of the parent | 3,848,098 |
| Revenue | 50,684,952 |
3,848,098 ÷ 50,684,952 × 100 = 7.6%
For the year ended March 31, 2026, Toyota earned about ¥7.6 of profit attributable to owners of the parent per ¥100 of revenue. Both inputs are consolidated IFRS annual figures from the same filing. This is not the share of revenue remaining as cash on hand.
Source elements
- Profit attributable to owners of the parent
- jpigp_cor:ProfitLossAttributableToOwnersOfParentIFRS
- CurrentYearDuration
- Revenue
- filer:TotalNetRevenuesIFRS
- CurrentYearDuration
What to watch
- Taxes, financing results and one-off gains or losses such as asset disposals can move net margin.
- Unlike operating margin, this is not a measure of operating profitability alone; it is also not cash flow.
- Compare the same industry, period, accounting standard and consolidation scope.
- The national ranking uses latest annual figures with a 60% net-margin cap to filter outliers, not a health benchmark.