Profit Margin Calculator
Gross Profit Margin
Calculate gross profit margin from revenue and cost of goods sold
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Net Profit Margin
Calculate net profit margin after all expenses, interest, and taxes
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Operating Profit Margin
Calculate operating profit margin (EBIT margin)
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Formula
Gross Margin = (Revenue - COGS) / Revenue × 100 | Operating Margin = (Revenue - COGS - OpEx) / Revenue × 100 | Net Margin = Net Income / Revenue × 100
Frequently Asked Questions
What is the difference between gross, operating, and net profit margin?
Gross margin = (Revenue - COGS) / Revenue. Operating margin = (Revenue - COGS - Operating Expenses) / Revenue (also called EBIT margin). Net margin = (Revenue - All Expenses including taxes and interest) / Revenue. Each level removes more costs.
What is a good profit margin?
It varies by industry. Retail: 2-5% net. Software/SaaS: 20-40% net. Manufacturing: 5-10% net. Restaurants: 3-9% net. Service businesses: 15-25% net. Compare your margins to industry benchmarks for the best assessment.
How can I improve my profit margin?
Increase prices, reduce COGS through better supplier deals, cut unnecessary operating expenses, improve operational efficiency, focus on higher-margin products/services, and reduce overhead costs.
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