Calculate gross, operating, and net profit margins for your business or product.
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Gross margin = (Revenue - COGS) / Revenue. Operating margin = (Revenue - COGS - Operating expenses) / Revenue. Net margin = Net profit / Revenue × 100.
Varies by industry. Retail: 2-5% net. Software: 20-40%. Consulting: 20-30%. Healthcare: 5-10%. Compare to industry average, not absolute numbers.
Gross margin = (Revenue - COGS) ÷ Revenue. Net margin = Net Income ÷ Revenue. Net margin accounts for all expenses including operating and taxes.
Gross Margin = (Revenue - Cost of Goods Sold) ÷ Revenue × 100. If you sell $100 product for $150: gross margin = ($150 - $100) ÷ $150 = 33%.
Physical products: 30-50%. Services/software: 60-80%. SaaS: 70-90%. Gross margin shows how efficiently you produce your product before overhead.
Raise prices (test 10-15% increase), reduce COGS (negotiate suppliers, optimize production), cut operating costs, or focus on highest-margin products/customers.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.