Core Metrics
IntermediateWhat is the difference between gross margin and net margin?
Gross margin focuses on production economics before operating expenses, while net margin includes all costs and taxes to show final profitability.
Quick Definition
Gross margin = (Revenue − COGS) ÷ Revenue. Net margin = Net Income ÷ Revenue. Gross margin shows production efficiency; net margin shows overall profitability after all expenses and taxes.
Use this concept with tools
Inflation-adjusted Return
Nominal return vs purchasing-power return.
CAGR
Calculate Compound Annual Growth Rate (CAGR) from start and end values. Convert between annualized returns and final investment amounts. Free CAGR calculator.
Compound Interest
Calculate compound interest growth with recurring contributions. See year-by-year balance breakdowns, total gains, and the power of compounding over time. Free online calculator.
Investor quotes to remember
“If you don't keep learning, others will surpass you.”
“The most dangerous words in investing are 'this time is different'.”
“I only bet when the odds are clearly in my favor.”
“Knowing what you don't know is more important than knowing what you do.”
Related concepts
What does an income statement tell me?
An income statement (P&L) shows revenues, costs, and profit over a period. Key items: revenue growth, gross margin trend, and net income. It answers: is the company consistently profitable?
What is ROE?
ROE (Return on Equity) = Net Income ÷ Shareholders' Equity. It measures how efficiently management generates profit from capital. Above 15% is generally considered strong.
Why do accounts receivable and inventory matter?
Rapidly growing accounts receivable signals slow cash collection; ballooning inventory may mean weak demand. Both can lead to write-offs, cash shortfalls, or earnings quality concerns.