Article · ~10 min read

Profit Margin: Definition, Formula, Types and Examples

Corporate Finance Institute · corporatefinanceinstitute.com Free Beginner

Sets out the three margins with their formulas (gross profit margin, operating profit margin and net profit margin, each as profit divided by revenue times 100), works an example and offers an Excel template.

  • Gross margin = gross profit / revenue x 100; net margin = net income / revenue x 100.
  • The gap between gross and net margin is your operating costs, interest and tax.
  • Download the template to compute all three from your own P&L.
Open on corporatefinanceinstitute.com ↗

The question it answers

  1. How do I calculate profit margin and ROI?

Read with it

  1. This is the cleanest side-by-side we found: it defines both margins in plain language and then walks the exact same $600,000... AccountingCoach Article · 5 min read What is the difference between gross margin and contribution margin? Harold Averkamp (AccountingCoach)
  2. This is the cleanest plain-language separation of the two margins we found, and it walks through both formulas with actual... Shopify Article · About 8 minute read Contribution Margin vs. Gross Margin: What's the Difference? Shopify
  3. Explains the ROI formula, works an example, shows how to annualise ROI so investments of different lengths compare fairly, and... corporatefinanceinstitute.com Article · ~10 min read Return on Investment: Formula, Meaning, and How to Calculate It Corporate Finance Institute
  4. A product seller's guide to gross, operating and net profit margin with the formula for each and ways to raise them, linked to... shopify.com Article · ~12 min read Profit Margin: How to Calculate It and Raise It Shopify
  5. A free calculator: enter your cost and either a price or a target margin and it returns the other, which is the fastest way to... shopify.com Tool · Calculator Profit margin calculator Shopify
eChai Partner Brands The partnership →