Operating Margin Calculator
Calculate operating income (EBIT), operating margin, gross profit, and gross margin from revenue, cost of goods sold, and operating expenses.
Enter values and click Calculate Margin to see results
Formula
What Is Operating Margin?
Operating margin (also called EBIT margin) measures the percentage of revenue that remains after deducting all operating expenses from gross profit. It reflects how efficiently a company manages its core operations.
Operating Margin Formulas
Gross Profit = Revenue − COGS
Operating Income (EBIT) = Gross Profit − Operating Expenses − Depreciation
Operating Margin = (Operating Income / Revenue) × 100
Gross Margin = (Gross Profit / Revenue) × 100
EBIT vs EBITDA
EBIT (Earnings Before Interest and Taxes) includes depreciation costs, while EBITDA adds back depreciation and amortisation. EBITDA provides a clearer view of operational cash generation by removing non-cash charges.
Industry Benchmarks
Operating margins vary by industry. Technology companies often achieve 20–30% operating margins, while retail businesses typically see 5–10%. Manufacturing usually falls in the 10–20% range.
Related Tools
- Profit Margin Calculator – Calculate gross and net margins
- Depreciation Calculator – Calculate SLM and WDV depreciation
- Break-Even Calculator – Find your break-even point
Frequently Asked Questions
What is operating margin?
Operating Margin = Operating Income ÷ Revenue × 100. It shows what percentage of revenue remains after covering operating expenses (before interest and taxes). Higher is better.
Is this calculator free, and do I need to sign up?
Yes, it is completely free with no sign-up. There are no usage limits and no paywalls.
Are my inputs saved or sent to any server?
No. Every calculation happens entirely in your browser. Nothing you type is uploaded, logged, or shared with us or any third party.