Gross vs Net Margin Challenge
Calculate gross profit, operating income and net profit margins from a company’s sales and costs.
Accounting puzzle
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Instructions, device progress and accessibility
Choose Easy, Normal, or Hard and select Practice or UTC Daily. Solve all accounting fields, then Check Answer. Hint and Undo mark a round as assisted. Progress stays on this device. All cases are fictional.
Local progress is checked when play begins.
How to play Gross vs Net Margin Challenge
Calculate gross profit, operating income and net profit margins from a company’s sales and costs. Choose Easy, Normal or Hard, enter the numeric answers and use Check Answer. Practice and daily challenges are free.
Worked accounting example
Sales of $10,000 with COGS $4,000 produce gross profit of $6,000 and a 60% gross margin. Subtract $2,000 operating expenses and $500 other expenses and taxes for net income $3,500 and a 35% net margin.
Accounting formulas and common mistakes
Gross margin = (sales − COGS) ÷ sales × 100. Net margin = net profit after operating costs, interest and taxes ÷ sales × 100. Gross profit is not net profit.
All fictional amounts use US dollars for illustration only. Exercises are educational, not business, tax or investment advice.
Frequently asked questions
What is the difference between gross and net profit margin?
Gross margin uses revenue minus direct cost of goods sold; net margin accounts for all costs included in net income.
Can net margin exceed gross margin?
In ordinary cases with positive expenses and no additional gains, net margin is below gross margin.