Profit margin calculator
What remains after the operating expenses, interest and income-tax amount you enter?
A teaching example in the units shown below.
These authored example inputs illustrate the calculation. Replace them with your own documented amounts, periods and rates; they are not measured industry averages or available offers.
Use one consistent period. Exclude pass-through sales tax and subtract returns and allowances.
Enter the complete cost of delivering those sales. Classify costs consistently with the operating-expense input.
Include relevant depreciation once here or in cost of sales. This is not an EBITDA calculation.
Enter interest expense, excluding repayment of loan principal.
Enter an actual estimate. A negative value means an explicitly assumed income-tax benefit; no tax rate is calculated.
Your entered scenario
Starting exampleCalculation updated using the entered assumptions.
- Gross margin
- 40.0%
- Operating margin
- 20.0%
- Pretax profit
- $1,800.00
Formula and interpretation
Gross profit = revenue − cost of sales
Operating profit = gross profit − operating expenses
Pretax profit = operating profit − interest expense
Net profit = pretax profit − entered income-tax expense
Each profit margin = the corresponding profit ÷ revenue
Use the same accounting period for every entry and include relevant depreciation once.
A negative tax amount is an explicit entered benefit. The tool does not determine tax liability, deductions or eligibility.
Definitions and sources
These references support the definitions and calculation boundaries. The starting numerical example is authored for arithmetic; each available business preset has its own evidence and limitations.
- Financial-statement definitions — U.S. Securities and Exchange Commission. Supports the income-statement sequence and the distinction between earnings and cash flows. Accessed September 5, 2026.
Continue with a related calculation
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Review startup uses, staffing, annual results and input evidence alongside the relevant worksheets. A single calculation does not replace local quotes or a dated cash schedule.
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