What Is The Difference Between Gross Margin, Operating Margin, And Profit Margin?

2025-10-14 09:23:18 136

3 Answers

Cecelia
Cecelia
2025-10-18 07:03:16
Gross margin measures the percentage of revenue remaining after subtracting the cost of goods sold, showing production efficiency. Operating margin includes all operating expenses, reflecting how effectively management controls costs. Profit margin, or net margin, is the final indicator after all expenses, taxes, and interest are deducted. Together, these three levels of margin provide a comprehensive view of a company’s financial performance and operational health.
Donovan
Donovan
2025-10-18 15:49:12
Margins tell a story in three parts: gross shows how well you produce, operating shows how efficiently you run the business, and profit shows the final reward. Each one digs deeper into how money flows through your company. When all three margins look strong, it’s a powerful sign of a healthy, well-managed business.
Xavier
Xavier
2025-10-19 09:35:55
Gross margin shows how much profit is left after making the product. Operating margin takes it a step further by also including costs like salaries and rent. Profit margin is what’s left after every single expense—including taxes and interest—is paid. Think of them as three layers of checking how much money your business keeps at each stage.
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