Profit Margin Template

Profit Margin Template

This profit margin template will allow you to calculate the gross profit, EBITDA, and net profit margins.

Below is a preview of the profit margin template:

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Profit margin is a measure of a company’s earnings (or profits) relative to its revenue. The two main types of profit margins are gross profit marginGross ProfitGross profit is the direct profit left over after deducting the cost of goods sold, or cost of sales, from sales revenue. It's used to calculate the gross profit margin. (gross profit divided by revenue) and net profit marginNet Profit MarginNet Profit Margin (also known as "Profit Margin" or "Net Profit Margin Ratio") is a financial ratio used to calculate the percentage of profit a company produces from its total revenue. It measures the amount of net profit a company obtains per dollar of revenue gained. (net income divided by revenue).

Profit Margin Formula

When assessing the profitability of a company, there are two main profit margin ratios to consider – gross and net. Below is a breakdown of each formula.

Gross Profit Margin = Gross Profit / Revenue x 100

Net Profit Margin = Net Income / Revenue x 100

What is a Good Profit Margin?

You may be asking yourself, “what is a good profit margin?” A good margin will vary by industry, but as a general rule of thumb, a 10% net profit margin is considered average, a 20% margin is considered high (or “good”), and a 5% margin is low. Of course, these guidelines can vary widely by industry, company size, and a variety of other factors.

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