Business Finance
Business Margin Calculator
Get a complete profitability picture — gross, operating, and net margin side-by-side — from a single set of inputs.
🔒 All calculations happen instantly in your browser. No data is sent to any server.
How the calculation works
Gross Margin = (Revenue − COGS) ÷ Revenue × 100
Operating Margin = (Revenue − COGS − Operating Expenses) ÷ Revenue × 100
Net Margin = (Revenue − COGS − OpEx − Interest − Taxes) ÷ Revenue × 100
Each margin strips away one more layer of cost. Comparing all three reveals where profitability is being eroded — production costs, overhead, or financing.
Frequently Asked Questions
- Looking at all three margins in one view reveals which layer is eating your profit. If gross margin is strong (60%) but operating margin is weak (8%), the problem is high overhead — not production costs.
- Depends on your goal. Investors typically focus on net margin (overall profitability). Operators focus on gross margin (product economics) and operating margin (management efficiency). Lenders often look at operating margin (debt service capacity).
- Industry-specific. Software: gross 70–80%, operating 20–30%. Retail: gross 30–50%, operating 3–8%. Professional services: gross 50–70%, operating 15–25%. Always benchmark against your direct competitors.
- The bars show each margin as a proportion of revenue. Longer green bars indicate healthier profitability at that level. Bars turn red when a margin is negative — costs exceed revenue at that stage.
- That's mathematically impossible — operating margin can never exceed gross margin because it deducts additional costs (operating expenses) on top of COGS. If you see this, check that you haven't mixed up COGS and operating expenses.