Income Statement Ratio Analyzer
Enter revenue, COGS, operating expenses, interest expense, and tax rate to compute gross, operating, and net margins plus interest coverage.
How It Works
Enter the five key line items from any company's income statement: total revenue, cost of goods sold (COGS), operating expenses (SG&A, R&D, depreciation, etc.), interest expense on debt, and the effective tax rate as a percentage. All five inputs auto-save to your browser so you can return and update them as quarterly reports are released.
The calculator constructs a full income statement waterfall — revenue cascading down through COGS, operating expenses, interest, and taxes until reaching net income. At each step, the corresponding margin percentage is displayed. The interest coverage ratio shows how many times the company can pay its interest obligations from operating profit, with a color-coded health indicator: green for strong, yellow for adequate or weak, and red for critical.
FAQ
What inputs do I need and what does the calculator do?
Enter the key line items from an income statement: total revenue, cost of goods sold (COGS), operating expenses (SG&A, R&D, etc.), interest expense, and the company's effective tax rate. The tool calculates gross profit, operating income, pre-tax income, and net income, then computes the three margin percentages and interest coverage ratio.
How should I interpret the three margins together?
Gross margin shows how efficiently a company produces its goods (revenue minus COGS as a % of revenue). Operating margin reveals day-to-day profitability after overhead. Net margin is the bottom line — what's left for shareholders after all expenses and taxes. Together they tell you where profit is being squeezed.
What does interest coverage tell me and what's a good number?
Interest coverage = operating income ÷ interest expense. It measures how easily a company can pay interest on its debt. Above 5 is strong, 2–5 is adequate, 1–2 is weak, and below 1 means operating income can't cover interest — a critical situation. A ratio below 1.5 often signals potential distress.
How do I know if the margins are good or bad?
Compare against industry peers (or the benchmarks shown on the results card). A retailer should have lower gross margins than a SaaS company. A utility typically carries more debt (lower interest coverage) than a tech firm. The waterfall breakdown shows you exactly where the profit erosion happens.
Can I use this for scenario analysis or forecasting?
Yes — by changing one assumption at a time. For example, keep revenue fixed and increase COGS to see what raw material inflation does to margins. Or simulate debt refinancing by changing the interest expense. Because all 5 inputs update in real time, you can stress-test scenarios instantly.
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