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Calculate gross, operating, and net profit margins from revenue and costs. See a full income statement breakdown with industry benchmarks.
Profit margin is the percentage of revenue remaining after costs are deducted. The three key types — gross, operating, and net — measure profitability at different stages of a company's income statement.
Direct costs: materials, labor, manufacturing
Rent, salaries, marketing, utilities, admin
Formula
Gross Margin = (Revenue − COGS) ÷ Revenue × 100Revenue = total sales or income
COGS = Cost of Goods Sold — direct materials and labor
Gross Margin = profit remaining before operating expenses, as a %
Worked Example
SaaS company: $500k revenue, $150k COGS, $200k OpEx
Did you know? Apple's gross margin consistently exceeds 43%, one of the highest for a hardware-centric company. Software businesses typically achieve 60–80% gross margins because their COGS are minimal once the product is built.
Sources
$60,000.00 profit on $100,000.00 revenue
$35,000.00 EBIT on $100,000.00 revenue
$25,000.00 net profit on $100,000.00 revenue
Note: These are general ranges and vary by company size and region.
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