A firm’s net profit margin is a key indicator of its profitability. Analyzing it can tell potential investors whether the business may be a good bet.

Profit margin conveys the relative profitability of a firm or business activity by accounting for the costs involved in producing and selling goods. Margins can be computed from gross profit, ...

A company's operating margin is the profit it makes on a dollar of sales after accounting for the direct costs involved in earning the revenue.