# Profit Margin Calculator

URL: https://speedycalculator.com/calculators/finance/profit-margin/
Last updated: 2026-10-25

> The profit margin calculator works out gross, operating and net profit margins from revenue, cost of goods sold, operating expenses, interest and taxes – showing each profit figure and margin.

## Inputs

- Revenue
- Cost of goods sold
- Operating expenses
- Interest expense
- Taxes

## Results

- Gross profit
- Gross margin
- Operating profit
- Operating margin
- Net profit
- Net profit margin

## Formula

```
Gross margin = (revenue − COGS) ÷ revenue
Operating margin = (gross profit − operating expenses) ÷ revenue
Net margin = (operating profit − interest − taxes) ÷ revenue
```

## Explanation

Gross margin shows pricing power and production efficiency; operating margin adds overhead; net margin is the bottom line. Compare margins with companies in the same industry.

### How to use the Profit Margin Calculator

- **Revenue**
- **Cost of goods sold**
- **Operating expenses**
- **Interest expense**
- **Taxes**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter revenue, cost of goods sold, operating expenses, interest and taxes for the period.

### Tips

- Know the difference between margin (profit ÷ price) and markup (profit ÷ cost).
- Apply successive discounts one after another – they do not simply add up.
- Check whether prices already include sales tax or VAT.
- Round prices only at the very end of the calculation.

### Common mistakes to avoid

- Adding discount percentages together.
- Pricing from a target margin using the markup formula.
- Forgetting payment-processing and shipping fees.

### Inputs explained

FieldWhat to enterRevenueAmount in your currencyCost of goods soldAmount in your currencyOperating expensesAmount in your currencyInterest expenseAmount in your currencyTaxesAmount in your currency

### What each result means

- **Gross profit** = [Revenue] - [Cost of goods sold]
- **Gross margin** = [Gross profit]÷[Revenue]×100
- **Operating profit** = [Gross profit] - [Operating expenses]
- **Operating margin** = [Operating profit]÷[Revenue]×100
- **Net profit** = [Operating profit] - [Interest expense] - [Taxes]
- **Net profit margin** = [Net profit]÷[Revenue]×100

### Example values

How the main result changes when **Revenue** changes and everything else stays at the example values above:

RevenueNet profit margin (%)250,000-71.2375,000-14.13500,00014.4625,00031.52750,00042.931,000,00057.2

## Worked example

Inputs — Revenue: $500,000; Cost of goods sold: $280,000; Operating expenses: $120,000; Interest expense: $10,000; Taxes: $18,000.

Results — Gross profit = $220,000.00; Gross margin = 44 %; Operating profit = $100,000.00; Operating margin = 20 %; Net profit = $72,000.00; **Net profit margin = 14.4 %**.

## FAQ

**What is a good net profit margin?**
About 10% is average across industries; 20%+ is high.

**What is the difference between gross and net margin?**
Gross margin only deducts COGS; net margin deducts all expenses.

**Can a company have a high gross margin and a low net margin?**
Yes, if overhead, interest or taxes are high.

**What formula does the Profit Margin Calculator use?**
Gross margin = (revenue − COGS) ÷ revenue.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)