Switch to:
Red Hat Inc (NYSE:RHT)
Net Margin
10.50% (As of Aug. 2014)

Net margin is calculated as net income divided by its revenue. Red Hat Inc's net income for the three months ended in Aug. 2014 was $47 Mil. Red Hat Inc's revenue for the three months ended in Aug. 2014 was $446 Mil. Therefore, Red Hat Inc's net margin for the quarter that ended in Aug. 2014 was 10.50%.

RHT' s 10-Year Net Margin Range
Min: -177.69   Max: 28.63
Current: 10.9

-177.69
28.63
RHT's Net Marginis ranked higher than
86% of the 1732 Companies
in the Global Software - Application industry.

( Industry Median: 3.80 vs. RHT: 10.90 )

Definition

Net margin - also known as net profit margin is the ratio of Net Income divided by net sales or Revenue, usually presented in percent.

Red Hat Inc's Net Margin for the fiscal year that ended in Feb. 2014 is calculated as

Net Margin=Net Income (A: Feb. 2014 )/Revenue (A: Feb. 2014 )
=178.292/1534.615
=11.62 %

Red Hat Inc's Net Margin for the quarter that ended in Aug. 2014 is calculated as

Net Margin=Net Income (Q: Aug. 2014 )/Revenue (Q: Aug. 2014 )
=46.823/445.899
=10.50 %

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Although Net Income and Earnings-per-Share (EPS) are the most widely used parameter in measuring a company’s profitability and valuation, it is the least reliable. The reason is that reported earnings can be manipulated easily by adjusting any numbers such as Depreciation, Depletion and Amotorization and non-recurring items.

But the long term trend of the net margin is a good indicator of the competitiveness and health of the business.


Related Terms

Net Income, Revenue, Cost of Goods Sold, Selling, General, & Admin. Expense, Research & Development, Depreciation, Depletion and Amortization, Interest Expense, Non-Recurring Items, Tax Expense


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Red Hat Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
netmargin 23.1228.6314.9514.6612.0611.6611.8012.9411.3011.62

Red Hat Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
netmargin 11.9010.8510.1212.3511.1210.9013.1211.268.9110.50
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK