Profit Margin Calculator

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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