About this tool
Profit Margin Calculator is a free, in-browser tool that computes the three standard P&L margins: gross margin from revenue minus cost of goods sold, operating margin after operating expenses, and net margin after interest, tax and other costs.
Each margin is the corresponding profit divided by revenue, expressed as a percentage: gross = (revenue − COGS) ÷ revenue, operating = (gross profit − opex) ÷ revenue, net = (operating income − other costs) ÷ revenue. Enter a target net margin and the tool also solves for the revenue you would need at your current cost base.
Use it to read a month's numbers at the three levels investors and lenders look at, or to see how a cost cut flows through to the bottom line. All figures stay in your browser.
Frequently asked questions
What is the difference between gross, operating and net margin?
Gross margin only subtracts direct product costs (COGS); operating margin also subtracts operating expenses like salaries, rent and marketing; net margin further subtracts everything else — interest, taxes and one-off costs. Each level tells you where profit is being made or lost.
How is the required revenue calculated?
It holds all your entered costs fixed and solves revenue = total costs ÷ (1 − target margin). In reality COGS usually scales with sales, so treat it as the revenue needed if costs stayed flat.
Can the margins be negative?
Yes — if costs at any level exceed revenue, the profit and margin at that level show as negative, which is exactly how a loss reads on a P&L.
Is this the same as markup?
No. Margin is profit ÷ revenue while markup is profit ÷ cost, so a 50% markup is only a 33.3% margin. This tool reports margins on revenue.