Calculate net profit after subtracting all costs including COGS, operating expenses, taxes, and other expenses from revenue.
It varies by industry. Technology companies often achieve 15-25%, retail 2-5%, healthcare 10-20%, and financial services 15-30%. A net margin above 10% is generally considered healthy.
Operating expenses include rent, utilities, salaries (non-production), marketing, insurance, and administrative costs. They are costs not directly tied to production.
Net profit determines actual profitability, helps calculate earnings per share, influences investor valuation, and determines how much can be reinvested or distributed as dividends.