Profit Margin Calculator
Calculate gross margin, operating margin, and net profit margin for your business. Enter your revenue, cost of goods sold, and operating expenses to see a complete breakdown of your profitability at each level.
Profit Margin Calculator
FAQ
What is the difference between gross and net profit margin?
Gross profit margin only subtracts the cost of goods sold (COGS) from revenue, showing how efficiently you produce goods. Net profit margin accounts for all expenses including operating costs, taxes, and interest, showing the overall profitability of the business.
What is a good profit margin?
Good profit margins vary by industry. In general, a net profit margin of 10% is considered average, 20% is good, and 5% or lower is considered low. Service businesses often have higher margins than retail or manufacturing.
How is operating margin calculated?
Operating margin is calculated as (Revenue - COGS - Operating Expenses) / Revenue x 100. It shows how much profit is generated from core business operations before accounting for interest and taxes.