Profit Margin Calculator
Calculate gross, operating, and net profit margins. Enter your revenue and costs to instantly see your profit margin percentages and amounts.
Margin Analysis
Understanding Profit Margins
Gross Margin measures profitability after direct costs:
Operating Margin includes operating expenses like rent and salaries. Net Margin is the bottom line after all expenses including taxes and interest.
Healthy margins vary by industry. Software companies often achieve 70-80% gross margins, while retail typically runs 25-50%. Track margins over time to spot trends.
Frequently Asked Questions
It varies by industry. Generally, a 10% net margin is average, 20% is good, and 5% or less is low. Software/SaaS companies often see 20-40% net margins, while grocery stores may operate on 1-3%.
Margin is profit as a percentage of revenue (selling price). Markup is profit as a percentage of cost. A 50% markup equals a 33.3% margin.
Increase prices, reduce COGS (negotiate with suppliers, improve efficiency), cut operating expenses, or increase sales volume to spread fixed costs.
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