Enter Your Numbers
Revenue Total sales
$
Cost of Goods Sold Direct costs
$
Operating Expenses Rent, salaries, marketing
$
Depreciation & Amortization Optional — asset depreciation
$
Operating Margin (EBIT Margin)
26.00%
Operating Profit: $130,000
Strong performer — your core operations are efficient.
Key Metrics
Gross Margin
60.0%
Operating Margin
26.0%
EBITDA Margin
30.0%
Gross Profit
$300K
EBIT
$130K
EBITDA
$150K
Full Breakdown
| Revenue | $500,000 |
| COGS | -$200,000 |
| Gross Profit | $300,000 (60.0%) |
| Operating Expenses | -$150,000 |
| Depreciation & Amort. | -$20,000 |
| Operating Profit (EBIT) | $130,000 (26.0%) |
| EBITDA | $150,000 (30.0%) |
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Revenue Breakdown
Margin Comparison
Formulas Used
Operating Profit (EBIT) = Revenue - COGS - Operating Expenses - Depreciation
Operating Margin = Operating Profit / Revenue x 100
EBITDA = Operating Profit + Depreciation & Amortization
EBITDA Margin = EBITDA / Revenue x 100
EBIT = Earnings Before Interest and Tax. EBITDA adds back depreciation/amortization for a cash-flow-focused view.
Frequently Asked Questions
What is operating margin?
Operating margin measures the percentage of revenue left after paying all operating costs (COGS + operating expenses + depreciation). It excludes taxes and interest, showing how efficiently your core business generates profit. A higher operating margin means more efficient operations.
What is the difference between EBIT and EBITDA?
EBIT (Earnings Before Interest and Tax) includes depreciation and amortization. EBITDA adds these back, giving a picture closer to cash flow. EBITDA is preferred when comparing companies with different asset bases, while EBIT is better for understanding true operational costs.
What is a good operating margin?
It depends on industry. Software: 30-40%. Manufacturing: 10-15%. Retail: 2-5%. A margin above your industry average is generally "good." The most important thing is consistent improvement year over year.
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