What is profit margin?

Profit margin expresses how much of each dollar of revenue is kept as profit after expenses. Three key types: Gross Margin = (Revenue − COGS) / Revenue. Operating Margin = (Revenue − COGS − OpEx) / Revenue. Net Margin = Net Profit / Revenue.

Gross margin vs net margin — what's the difference?

Gross margin only deducts direct production costs (COGS). Net margin deducts everything — COGS, operating expenses, interest, taxes — showing the true bottom line.

How do I find the price needed for a target margin?

Use the Find Required Price tab. Enter your cost per unit and desired gross margin percentage — the calculator gives the exact selling price: Price = Cost ÷ (1 − Margin%).

What is a profit waterfall?

A profit waterfall shows how revenue shrinks as each expense layer is deducted — from Revenue to Gross Profit, to Operating Profit, to Net Profit. It visually identifies where the most profitability is lost.

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Profit Margin Calculator

Q: What is a good profit margin by industry?

Software/SaaS: 70–80% gross, 20–30% net. Retail: 25–35% gross, 2–5% net. Restaurants: 60–70% gross, 3–9% net. Manufacturing: 25–35% gross, 5–10% net.

Calculate gross, operating & net margins — with waterfall chart and reverse price finder.

Revenue (total sales)

Cost of Goods Sold (COGS)

Operating Expenses (salaries, rent, marketing)

Other Expenses & Taxes

Enter your revenue and costs above to see instant margin analysis with charts.

About Profit Margin Calculator

This free profit margin calculator gives you an instant visual breakdown of your gross, operating, and net profit margins — including a waterfall chart showing exactly where revenue is consumed at each expense layer. It also includes a reverse price finder: enter your unit cost and target margin to get the exact selling price you need. All calculations run locally in your browser — your financial data is never sent anywhere.

How to Use

Enter RevenueType your total sales revenue for the period — month, quarter, or year.

Add COGSEnter your Cost of Goods Sold — materials, direct labor, and production costs.

Add Operating ExpensesFill in salaries, rent, marketing, utilities — everything needed to run the business.

Read the ChartsThe donut shows how revenue is split; the waterfall bar chart shows profit at each stage. Cards are color-coded: 🔴 below 10%, 🟡 10–20%, 🟢 above 20%.

Use Find Required PriceSwitch tabs, enter your unit cost and desired gross margin — get the exact selling price needed.

🔒 Privacy note: All processing happens locally in your browser. Your financial data is never sent to any server.

Why Use This Calculator?

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Visual Charts Included Donut chart shows revenue breakdown; bar chart shows the profit waterfall — no spreadsheets needed.

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3 Margins at Once Calculates gross, operating, and net margin simultaneously — and color-codes each by industry health standards.

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Reverse Price Finder Know your cost? Enter the margin you want and get the exact selling price to charge — critical for pricing strategy.

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100% Private Revenue figures, costs, and margins never leave your browser. No account, no data collection, no ads tracking your inputs.

Frequently Asked Questions

Profit margin shows how much of each dollar of revenue is kept as profit after expenses. Gross Margin = (Revenue − COGS) ÷ Revenue. Operating Margin = (Revenue − COGS − OpEx) ÷ Revenue. Net Margin = Net Profit ÷ Revenue — the final bottom line after all costs including taxes.

Gross margin only deducts the direct costs of producing your goods (COGS) — it shows production efficiency. Net margin deducts everything: COGS, operating expenses, interest, and taxes — showing what's truly left for shareholders. A business can have 70% gross margin but only 5% net margin if overhead is heavy (common in retail and services).

Margins vary widely by sector: Software/SaaS 70–80% gross, 20–30% net. Retail 25–35% gross, 2–5% net. Restaurants 60–70% gross, 3–9% net. Manufacturing 25–35% gross, 5–10% net. Consulting 60–75% gross, 15–25% net. Always compare against your specific industry peer group.

Use the Find Required Price tab. Enter your cost per unit and the gross margin % you want. The formula is: Price = Cost ÷ (1 − Margin%). For example, a $25 cost at 40% margin → Price = $25 ÷ 0.60 = $41.67.

A profit waterfall shows how revenue shrinks as each expense layer is deducted: Revenue → Gross Profit (after COGS) → Operating Profit (after OpEx) → Net Profit (after taxes & other costs). It quickly reveals which expense layer consumes the most profitability.