Calculate gross profit margin, operating margin, and net profit margin from your revenue and costs. Understand your business profitability at every level.
Total sales or income
Direct costs of producing goods
Rent, salaries, utilities, etc.
Interest, taxes, one-time costs
Gross Margin
60.0%
$60,000.00
Operating Margin
35.0%
$35,000.00
Net Margin
30.0%
$30,000.00
Revenue
$100,000.00
Cost of Goods Sold
$40,000.00
Grocery / Food
Typical gross margin: 3-5%
3-5%
Retail
Typical gross margin: 5-10%
5-10%
Manufacturing
Typical gross margin: 10-15%
10-15%
SaaS / Software
Typical gross margin: 70-80%
70-80%
Consulting
Typical gross margin: 15-25%
15-25%
Your gross margin: 60.0% | Net margin: 30.0%
Profit per $1 Revenue
$0.30
net profit per dollar earned
Monthly Revenue
$8,333
to maintain this annual rate
Daily Revenue Needed
$278
average daily sales target
Profit margins are key indicators of financial health. Gross margin shows production efficiency, operating margin reveals how well you manage overhead, and net margin captures the bottom line after all costs. Tracking all three helps identify exactly where your business is strong and where it can improve. Comparing margins over time and against industry benchmarks gives you actionable insight into pricing, cost control, and overall business strategy.
Gross profit margin measures the percentage of revenue remaining after subtracting the cost of goods sold (COGS). It shows how efficiently a business produces its goods or services. A higher gross margin means more money is available to cover operating expenses and generate profit.
Operating margin (also called EBIT margin) is the percentage of revenue left after deducting both COGS and operating expenses like rent, salaries, and utilities. It reflects the profitability of core business operations before interest and taxes.
Net profit margin is the percentage of revenue that remains as profit after all expenses — including COGS, operating expenses, interest, taxes, and other costs. It's the bottom-line measure of overall business profitability.
Good profit margins vary by industry. Retail businesses might see net margins of 2-5%, while software companies can reach 20-30% or higher. Compare your margins to industry benchmarks rather than absolute numbers to gauge performance.
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Calculate EBITDA and EBITDA margin from your financial statements. A key metric used in business valuation, loan underwriting, and comparing profitability across companies.