Net margin

What is left of revenue after ALL costs, as a percentage. The business's true take-home efficiency, and the number tax returns and buyers ultimately read.

Where gross margin judges each sale, net margin judges the whole machine: after direct costs, rent, wages, marketing, fees, and everything else, what share of revenue actually remained?

For owner-operated businesses the honest version needs one adjustment: pay yourself a market wage in the calculation. A "profitable" business that only works because the owner works for free has a hidden loss, and every buyer will price it that way, which is exactly the logic of SDE.

Net margin is where all leaks surface eventually, which makes it a quarterly truth-teller rather than a weekly steering wheel: weekly steering happens on gross margin and the other short-list KPIs.