This calculator will help determine your Gross Profit Margin, Operating Margin, Net Profit Margin, and how your business compares to your peers.
Gross Profit
Gross margin is the difference between revenue and cost before accounting for certain other costs. Generally, it is calculated as the selling price of an item, less the cost of goods sold (production or acquisition costs, essentially).
| Gross Margin = | Revenue - COGS |
| Revenue |
Operating Profit
Operating margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt.
| Operating Margin = | Gross Profit - Operating Expenses |
| Revenue |
Net Profit
Net profit margin is the percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue.
| Net Margin = | Operating Profit - Interest - Taxes |
| Revenue |