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 Marathon Petroleum (MPC) revenue becomes net income?

For TTM through Q1 2026, Marathon Petroleum turned $136B of revenue into $4.63B of net income — a net margin of 3.4%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Marathon Petroleum (MPC) gross, operating, and net margins?

For TTM through Q1 2026, Marathon Petroleum reported a gross margin of 8.8%, an operating margin of 5%, and a net margin of 3.4%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Marathon Petroleum (MPC) 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.

Marathon Petroleum (MPC) Income Statement Waterfall

Revenue

$136B

Gross Margin

+8.8%

Operating Margin

+5.0%

Net Margin

+3.4%

Income statement waterfall for Marathon Petroleum (MPC) — TTM through Q1 2026

Net income: $4.63B

Margin breakdown for Marathon Petroleum (MPC) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$136B	$136B
Cost of Revenue	-$124B	$11.9B
Gross Profit	$11.9B	$11.9B
Operating Expenses	-$5.13B	$6.82B
Operating Income	$6.82B	$6.82B
Other Income / Expense	$848M	$7.67B
Pre-tax Income	$7.67B	$7.67B
Income Tax	-$1.28B	$6.38B
Other Items	-$1.75B	$4.63B
Net Income	$4.63B	$4.63B

Revenue$136B
Cost of Revenue-$124B
Gross Profit$11.9B
Operating Expenses-$5.13B
Operating Income$6.82B
Other Income / Expense$848M
Pre-tax Income$7.67B
Income Tax-$1.28B
Other Items-$1.75B
Net Income$4.63B

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