Profit Margin Calculator
Calculate gross, operating, and net profit margin from revenue and costs. Enter revenue, cost of goods sold (COGS), operating expenses, and other expenses. Margins show profitability as a percentage of revenue.
Profit margin calculator
Result
What is this?
Profit margin is profit as a percentage of revenue. Gross margin = (Revenue − COGS) / Revenue. Operating margin includes operating expenses. Net margin includes all expenses. Higher margins mean more efficient profitability. COGS (cost of goods sold) is the direct cost of producing what you sell. Operating expenses include rent, salaries, marketing—costs to run the business. Net margin is the bottom line after everything. Different industries have different typical margins. Use this to understand your business or compare to benchmarks. Enter revenue and your various cost categories.
When to use
Use for business analysis, pricing decisions, or comparing companies. Example: $100k revenue, $40k COGS = 60% gross margin. Add $30k operating = 30% operating margin. Business owners track profitability. Investors compare companies by margin. See how cost changes affect margins. Understand where profit comes from. Price products to achieve target margins. Essential for any business. Compare your margins to industry averages. Identify areas to improve efficiency.
How to use
Gross margin = (Revenue − COGS) / Revenue × 100. Operating margin includes operating expenses. Net margin includes all expenses.
COGS = direct costs of producing goods. Operating = rent, salaries, etc.
Frequently asked questions
- Gross margin = (Revenue − COGS) / Revenue × 100. It shows profitability after direct production costs. COGS = cost of goods sold.
- Operating margin = (Revenue − COGS − Operating expenses) / Revenue × 100. It reflects profitability from core operations before interest and taxes.
- Net margin = Net profit / Revenue × 100. It is the bottom-line profitability after all expenses, including interest and taxes.