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Profit Margin Calculator

Calculate gross, operating, and net profit margins to understand your business profitability. Optimize pricing strategies and identify cost-cutting opportunities.

Revenue & Sales

Total sales revenue for the period

Direct Costs

Direct costs: materials, labor, manufacturing, shipping

Operating Expenses

Rent, salaries, marketing, utilities

Income taxes and other taxes

Loan interest and financing costs

Profitability Analysis

Gross Profit Margin
40.0%
Gross Profit: $40,000
Revenue minus direct costs
Operating Profit Margin
15.0%
Operating Profit: $15,000
Gross profit minus operating expenses
Net Profit Margin
10.0%
Net Profit: $10,000
Final profit after all expenses
EBITDA Margin
17.0%
EBITDA: $17,000
Operating profit plus interest (approx.)

Profit Waterfall

Revenue+$100,000
- Cost of Goods Sold-$60,000
= Gross Profit$40,000
- Operating Expenses-$25,000
= Operating Profit$15,000
- Taxes & Interest-$5,000
= Net Profit$10,000

Industry Benchmark Ranges

Retail
Gross: 20-50% | Net: 2-5%
Software/SaaS
Gross: 70-90% | Net: 15-25%
Restaurants
Gross: 60-70% | Net: 3-8%
Manufacturing
Gross: 25-35% | Net: 5-10%
Services
Gross: 50-80% | Net: 10-20%
Healthcare
Gross: 40-60% | Net: 8-15%

Profit Margin Analysis

10.0%
Net Profit Margin | $10,000 net profit

Key Insights:

  • Good gross margin - healthy unit economics
  • Decent operational performance - room for expense optimization
  • Good net profitability - sustainable business model

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