Profit margin, explained. How many cents of every dollar a company keeps.
By Nexqual Desk ·
Tickers: $NVDA $MSFT $KO $AAPL $COST $WMT
Profit margin, explained. How many cents of every dollar a company keeps.
Net profit margin is net profit divided by revenue. It shows how much of each sale turns into profit.
Net profit ÷ Revenue
$20 billion profit on $100 billion of sales → 20% margin. The company keeps 20 cents per dollar.
Right now:
$NVDA 63.7%
$MSFT 40.3%
$KO 28.6%
$AAPL 27.6%
$COST 3.0%
$WMT 3.0%
How to read it:
• Software and chip designers often keep 30%+. Retailers keep a few cents.
• Rising margins mean the business is getting more efficient or has pricing power.
• Compare a company with its own history and its direct rivals.
Watch out: A low margin is not bad by itself. Costco earns thin margins on huge volume, by design.
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Education only. Not financial advice.
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