Net margin is net income divided by total income. It lets you compare months and years of different sizes.

Before drawing conclusions, look for one-time items. A large grant, an insurance settlement, or a one-time repair can make a single month look much better or worse than normal operations. Many directors look at results both with and without one-time items.

Restricted grants deserve extra care. If a donor or funder restricts a grant to a specific purpose, the money shows up as income but cannot be used for payroll or rent.