What is an income statement waterfall?

An income statement waterfall is a bar chart that walks from total revenue down to net income, with each step showing how much a cost or tax line removes (or adds). Subtotals — gross profit, operating income, pre-tax income — are anchored to zero so the cascade reconciles exactly to the bottom line.

How much of McCormick & Company (MKC) revenue becomes net income?

For TTM through Q2 2026, McCormick & Company turned $7.39B of revenue into $1.63B of net income — a net margin of 22%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are McCormick & Company (MKC) gross, operating, and net margins?

For TTM through Q2 2026, McCormick & Company reported a gross margin of 38.6%, an operating margin of 15.3%, and a net margin of 22%. Each subtotal in the waterfall corresponds to one of these margins.

Why does McCormick & Company (MKC) have such a high (or low) gross margin?

Gross margin (gross profit ÷ revenue) reflects how much of each revenue dollar remains after direct production costs. Capital-light software and platform businesses often show gross margins above 60–80% because their cost of revenue is mainly hosting and support. Hardware, retail, and commodity businesses show lower gross margins because raw materials and manufacturing costs are significant. The waterfall makes this visible at a glance — the size of the "Cost of Revenue" bar relative to Revenue is the gross margin complement.

What is the difference between gross, operating, and net margin?

Gross margin = (Revenue − Cost of Revenue) ÷ Revenue. It measures production efficiency. Operating margin = Operating Income ÷ Revenue. It adds operating expenses (R&D, S&M, G&A) and measures the profitability of core operations. Net margin = Net Income ÷ Revenue. It also includes interest, other income/expense, and taxes, and represents the shareholder take after everything.

McCormick & Company (MKC) Income Statement Waterfall

Revenue

$7.39B

Gross Margin

+38.6%

Operating Margin

+15.3%

Net Margin

+22.0%

Income statement waterfall for McCormick & Company (MKC) — TTM through Q2 2026

Net income: $1.63B

Margin breakdown for McCormick & Company (MKC) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$7.39B	$7.39B
Cost of Revenue	-$4.53B	$2.85B
Gross Profit	$2.85B	$2.85B
Operating Expenses	-$1.72B	$1.13B
Operating Income	$1.13B	$1.13B
Other Income / Expense	-$171M	$962M
Pre-tax Income	$962M	$962M
Income Tax	-$217M	$745M
Other Items	$883M	$1.63B
Net Income	$1.63B	$1.63B

Revenue$7.39B
Cost of Revenue-$4.53B
Gross Profit$2.85B
Operating Expenses-$1.72B
Operating Income$1.13B
Other Income / Expense-$171M
Pre-tax Income$962M
Income Tax-$217M
Other Items$883M
Net Income$1.63B

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