Net Margin 5 Year Average

Returns the five-year average net profit margin for a company. Net margin shows what percentage of revenue translates to bottom-line profit.

Supported Symbol Formats

Type Format Example
US Stocks SYMBOL AAPL, MSFT

Formula

Net Margin = Net Income / Revenue

Industry Benchmarks

Industry Typical Net Margin
Software 20-35%
Finance 15-25%
Healthcare 10-20%
Consumer Goods 5-15%
Retail 2-5%
Grocery 1-3%

Notes

  • Returns value as a decimal (0.20 = 20%)
  • Includes all expenses including taxes and interest
  • The "bottom line" profitability metric

Examples

=NetMarginFiveYearAverage("AAPL")
Apple 5-year avg net margin
=NetMarginFiveYearAverage("MSFT")
Microsoft 5-year avg net margin
=NetMarginFiveYearAverage("WMT")
Walmart 5-year avg net margin
=NetMarginFiveYearAverage(A1)
Symbol from cell reference
=NetMarginFiveYearAverage("MSFT")*100
Convert to percentage

When to Use

  • Assess overall profitability
  • Compare profit efficiency across companies
  • Value investing analysis
  • Long-term profitability trends

When NOT to Use

Scenario Use Instead
Gross margin GrossMarginFiveYearAverage()
EBITDA margin EBITDAMarginFiveYearAverage()
Margin growth NetProfitMarginOneYearGrowth()
Net income growth NetIncomeGrowthFiveYearCAGR()

Common Issues & FAQ

Q: Why is the value less than 1? A: Net margin is returned as a decimal. Multiply by 100 to get percentage (e.g., 0.20 = 20%).

Q: Why is Walmart's margin so low? A: Retail operates on thin margins but high volume. A 2-3% net margin is normal for grocery/retail. Compare within same industry.

Q: Can net margin be negative? A: Yes, companies with net losses will have negative net margins. This often occurs with growth-stage companies investing heavily.

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MarketXLS Excel Add-in Tutorial - How to Use Net Margin 5 Year Average and Other Financial Formulas
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