Profit Margin Calculator

Profit margin is the share of revenue you keep as profit. With $100,000 in sales and $70,000 in cost of goods sold, the gross margin is 30%. After $10,000 of operating costs, the operating margin is 20%. After $5,000 of interest and taxes, the net margin is 15%.

Enter revenue and cost of goods sold (COGS), which is the direct cost of what you sold. The tool shows the gross margin, the gross profit and the markup on cost. Add operating expenses or interest and taxes, and it also shows the operating and net margins with their dollar profits. Leave those fields at 0 if you only need the gross figure.

Each margin answers a different question. Gross margin shows whether your products or services are priced well above their direct cost. Operating margin shows whether the business covers rent, wages, marketing and other running costs. Net margin is the bottom line after everything. Margins mean most when compared: with your own past results, or with businesses of a similar type. What counts as healthy varies widely between industries. A grocery store and a software company can both be well run with very different margins.

A margin is not the same as markup. A 30% gross margin comes from a 42.9% markup on cost. The Markup vs Margin Calculator explains the link. To find how many sales cover your costs, try the Break-Even Calculator.