Profit Margins
How much of each sale becomes profit.
A margin is profit expressed as a percentage of revenue. It tells you how much of each rupee of sales the company actually keeps. Different margins measure different stages of the P&L. Operating margin Operating profit ÷ revenue. Profitability of the core business, before interest and tax. Net margin Net profit ÷ revenue. The final slice kept after everything. Revenue Rs 1,000, operating profit Rs 250, net profit Rs 150. Operating margin = 25%, net margin = 15%. Track margins over several years. Widening margins signal pricing power or efficiency; shrinking margins signal rising costs or competition. Reveals efficiency and pricing power Comparable across time Simple percentage Differs sharply by industry One-offs distort a single year Doesn't show absolute size
Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: The Ratios.