Profit Margin Calculator
Works out gross, operating and net margin from your revenue and costs.
Share sends a link that reopens these numbers. Copy details pastes the full breakdown as a list.
The formula
gross margin = (revenue − cost of goods) ÷ revenue operating margin = (gross profit − operating expenses) ÷ revenue net margin = (operating profit − interest, tax and other costs) ÷ revenue
Each margin takes more costs off before dividing by the same revenue, so gross is the highest and net the lowest.
What to watch out for
Use figures from the same period for everything. Put each cost at one level only, or it will be counted twice.
Frequently Asked Questions
How do I calculate profit margin?
Divide the profit at each level by revenue. With revenue of 100,000, cost of goods of 40,000, operating expenses of 30,000 and other costs of 5,000, gross margin is 60%, operating margin is 30% and net margin is 25%.
What is the difference between gross and net margin?
Gross margin only takes off the direct cost of what you sold. Net margin takes off every cost, so it shows what is left from each unit of revenue.
What is a good profit margin?
It varies by industry, and with the size and age of the business. Your own trend over time and the figures of similar businesses are the fairest comparisons.