Business Profit Margin Calculator

Calculate your business profit margins to understand profitability and pricing.

Calculate Profit Margins

Profit Analysis

Gross Profit—
Gross Profit Margin—
Operating Profit—
Operating Profit Margin—
Net Profit—
Net Profit Margin—

Understanding profit margins

Different profit margins tell you different things about your business health.

Gross Profit: Revenue - COGS
Gross Margin: (Gross Profit / Revenue) × 100

Operating Profit: Gross Profit - Operating Expenses
Operating Margin: (Operating Profit / Revenue) × 100

Net Profit: Operating Profit - Other Expenses
Net Margin: (Net Profit / Revenue) × 100

Healthy margins vary by industry: Retail (2-5%), Restaurants (3-6%), Software (15-25%), Services (10-20%).

FAQs

What's a good profit margin?

Depends on industry. Retail: 2-5%, Services: 10-20%, Software: 20-30%. Compare with competitors in your sector.

What's the difference between gross and net profit?

Gross profit is revenue minus cost of goods. Net profit is what's left after ALL expenses including operating costs, taxes, interest.

How can I improve my profit margin?

1) Increase prices, 2) Reduce COGS, 3) Cut operating expenses, 4) Increase sales volume, 5) Focus on high-margin products.

What are operating expenses?

Rent, salaries, utilities, marketing, insurance – costs to run the business that aren't directly tied to making products.

Should I focus on revenue or profit?

Profit! Many businesses have high revenue but low profit. Profit is what you actually keep.