Free tool
Operating margin calculator
See what is left after the cost of what you sell and the cost of running the business. Enter revenue, cost of goods sold and operating expenses.
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How it works
How it works
Gross profit is revenue minus cost of goods sold. Operating income is gross profit minus operating expenses. Each margin is that profit divided by revenue.
FAQ
About this calculator
What is the difference between operating margin and net margin?
Operating margin stops before interest and taxes. Net margin is after everything, so it includes interest, taxes and other income and expenses.
What belongs in operating expenses?
Day-to-day costs of running the business, such as rent, wages, software and marketing. Leave out interest and income taxes.
Is a higher margin always better?
Usually, but compare with similar businesses and your own history, since margins vary by industry.
Is anything saved?
No. The math runs in your browser and nothing you enter is sent to us.
Is this tax or financial advice?
No. It is a calculator for general information. Check the numbers against your own records, and ask an accountant before you act on them.
Related: net profit margin calculator, profit margin and markup calculator. See all free tools. More free tools: Small business tax deadlines, Receipt Expense Report, Bank Statement Converter, or see all free tools.
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Financial Ratio Analysis Workbook
Enter three years of statements and see margins, liquidity, leverage and efficiency ratios side by side, with what each one means in plain English.
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