Profit Margin Calculator 2026
Compute gross, operating, and net margin from a one-page income statement. Standard profitability metrics for any business.
Net sales — total invoiced amount minus returns and discounts.
Raw materials, direct labour, freight-in. Costs that go directly into producing goods sold.
Salaries, rent, utilities, marketing, depreciation.
Non-operating income: interest earned, asset sale gains, etc.
Loan interest paid during the period.
Income tax paid for the period.
Net margin
15%
Net profit of ₹15.00 L on ₹1.00 Cr revenue.
Where the revenue goes
Income statement breakdown
| Line item | Amount | % of revenue |
|---|---|---|
| Revenue | ₹1.00 Cr | 100.00% |
| − Cost of Goods Sold (COGS) | (₹60.00 L) | 60.00% |
| Gross profit | ₹40.00 L | 40% |
| − Operating expenses (OpEx) | (₹20.00 L) | 20.00% |
| Operating profit (EBIT) | ₹20.00 L | 20% |
| + Other income | ₹1.00 L | 1.00% |
| − Interest expense | (₹2.00 L) | 2.00% |
| − Tax | (₹4.00 L) | 4.00% |
| Net profit | ₹15.00 L | 15% |
The Profitability Hierarchy: Dissecting Gross, Operating, and Net Margins
Profit margins express the percentage of revenue a business retains after accounting for various layers of expenditure: Gross Margin reflects unit economics, Operating Margin (EBITDA) measures core operational efficiency, and Net Margin reveals the ultimate bottom line after interest and corporate income taxes.
Profit Margin FAQs
Clear definitions and financial ratio benchmarks for enterprises.
What is the mathematical difference between Margin and Markup?
Margin is profit expressed as a percentage of the selling price: (Profit ÷ Selling Price) × 100. Markup is profit expressed as a percentage of the cost of goods: (Profit ÷ Cost) × 100.
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