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:

Download the Free Template

Enter your name and email in the form below and download the free template now!

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 and is the initial profit figure listed on a company's income statement. Gross profit is calculated before operating profit or net profit. (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.

More Free Templates

For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentation, and Word document templates.

• Excel Modeling TemplatesExcel & Financial Model TemplatesDownload free financial model templates - CFI's spreadsheet library includes a 3 statement financial model template, DCF model, debt schedule, depreciation schedule, capital expenditures, interest, budgets, expenses, forecasting, charts, graphs, timetables, valuation, comparable company analysis, more Excel templates
• PowerPoint Presentation Templates
• Transaction Document TemplatesTemplatesFree business templates to use in your personal or professional life. Templates include Excel, Word, and PowerPoint. These can be used for transactions, legal, financial modeling, financial analysis, business planning and business analysis.