📊 Profit Margin Calculator
Calculate gross, operating, and net profit margins
How Profit Margin Calculation Works
Formula
Net Profit Margin = (Net Income / Revenue) × 100
- 1Enter your total revenue and cost of goods sold (COGS).
- 2Gross profit margin is calculated: (Revenue − COGS) / Revenue × 100.
- 3Enter operating expenses to calculate operating margin.
- 4Enter taxes and interest to calculate net profit margin.
- 5The tool displays all three margin levels for complete profitability analysis.
About Profit Margin Calculator
Calculate gross profit margin, operating margin, and net profit margin. Enter revenue and costs to find your profit margins with detailed breakdown and analysis.
Frequently Asked Questions
What is the difference between gross and net profit margin?
Gross margin only subtracts direct production costs (COGS). Net margin subtracts all expenses including operating costs, taxes, and interest. Net margin is always lower than gross margin.
What is a healthy profit margin?
It varies by industry. A 10% net profit margin is generally considered average, 20%+ is high. Tech companies often have 20-30% net margins while grocery stores may have 1-3%.
Why is profit margin important?
Profit margin shows how efficiently a business converts revenue into profit. It helps compare companies of different sizes and track financial health over time.