🧮 Universal Margin Calculator
Calculate all types of margins for worldwide audience
Gross Margin Calculator
Formula: Gross Margin % = ((Revenue - COGS) ÷ Revenue) × 100
Gross Profit:
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Gross Margin %:
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Net Margin Calculator
Formula: Net Margin % = (Net Income ÷ Revenue) × 100
Net Income:
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Net Margin %:
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Markup Calculator
Formula: Markup % = ((Selling Price - Cost) ÷ Cost) × 100
Markup Amount:
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Markup %:
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Profit Margin Calculator
Formula: Profit Margin % = (Profit ÷ Revenue) × 100
Profit Margin %:
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Operating Margin Calculator
Formula: Operating Margin % = (Operating Income ÷ Revenue) × 100
Operating Margin %:
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Contribution Margin Calculator
Formula: Contribution Margin % = ((Revenue - Variable Costs) ÷ Revenue) × 100
Contribution Margin:
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Contribution Margin %:
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Frequently Asked Questions
What is Gross Margin and how is it calculated?
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Gross margin is the profit a company makes after deducting the cost of goods sold (COGS) from revenue. It measures the percentage of revenue left after paying for production costs. Formula: ((Revenue - COGS) ÷ Revenue) × 100. A higher gross margin indicates better profitability at the production level.
What is the difference between Margin and Markup?
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Margin is calculated based on selling price: (Profit ÷ Selling Price) × 100. Markup is calculated based on cost: (Profit ÷ Cost) × 100. They represent different perspectives on profitability. For example, a 20% markup equals approximately 16.67% margin. Margin is typically lower than markup.
What is Net Margin and why is it important?
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Net margin is the percentage of revenue left as profit after all expenses are deducted, including COGS, operating costs, interest, and taxes. It's calculated as (Net Income ÷ Revenue) × 100. It's important because it shows the true profitability of a business and is often used by investors to evaluate financial health.
What is Operating Margin?
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Operating margin measures what percentage of a company's revenue remains as profit after paying operating expenses (COGS and operating costs). It excludes interest and taxes. Formula: (Operating Income ÷ Revenue) × 100. It helps assess how efficiently a company operates its core business.
What is Contribution Margin and when is it used?
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Contribution margin is the revenue remaining after deducting variable costs. Formula: (Revenue - Variable Costs) ÷ Revenue × 100. It's used in break-even analysis and cost-volume-profit analysis. Contribution margin shows how much each unit sold contributes to covering fixed costs and generating profit.
What is considered a healthy margin percentage?
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Healthy margins vary significantly by industry. Retail typically operates on 5-10% net margins, e-commerce 10-20%, software 20-40%, professional services 15-30%. Manufacturing may have 5-15%. Always compare your margins with industry benchmarks to understand your competitive position better.
How can I improve my margins?
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To improve margins: 1) Increase selling prices, 2) Reduce cost of goods sold through better suppliers or production efficiency, 3) Reduce operating expenses, 4) Improve product mix to sell higher-margin items, 5) Negotiate better payment terms, 6) Reduce waste and inefficiencies, 7) Improve inventory turnover.
Understanding Margin Types
Gross Margin: Measures profitability at the production level by analyzing the relationship between revenue and cost of goods sold.
Net Margin: Represents the bottom-line profitability, showing what percentage of revenue becomes actual profit after all expenses.
Operating Margin: Indicates operational efficiency by measuring profit relative to revenue before considering finance and tax costs.
Markup: Shows the percentage added to the cost to determine selling price, often used in pricing strategy and retail.