Profit Margin Calculator
Enter revenue and costs to see your full P&L waterfall with gross, operating, and net margins.
Total sales / net revenue
Direct production costs
SG&A, R&D, overhead
Income tax + interest expense
Revenue
$500,000
− COGS
-$300,000
Gross Profit
40.00%
$200,000
− Operating Expenses
-$80,000
Operating Profit
24.00%
$120,000
− Taxes & Interest
-$20,000
Net Profit
20.00%
$100,000
How This Calculator Works
This profit margin calculator walks through a three-level income statement waterfall. First, it subtracts the Cost of Goods Sold (COGS) from revenue to arrive at Gross Profit— the purest measure of how efficiently you produce or deliver your product. Next, it deducts Operating Expenses (SG&A, R&D, overhead) to give you Operating Profit, which shows how profitable the core business is before financing and taxes. Finally, it subtracts taxes and interest to reveal Net Profit — the true bottom line.
Each profit level is expressed as both a dollar amount and a margin percentage relative to revenue. This makes it easy to track how your margins compress — or expand — at each stage. A business might have a healthy 60% gross margin but a weak 5% net margin if overhead is excessive; the waterfall makes that compression immediately visible.
Use this tool to compare your margins against industry benchmarks, model the impact of cost reductions or price increases, or prepare financial projections for investors. Results update in real time as you adjust inputs, so you can run scenarios instantly.