Finance

Profit Margin Calculator

Calculate gross profit margin from revenue and cost of goods sold.

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The gross profit is the money left after the cost of goods sold, and the margin percentage shows that profit as a share of revenue, so it tells how much of each sales dollar remains after direct costs.

Formula

Margin equals revenue minus cost, divided by revenue, times 100.

How it works

Margin shows what share of each sales dollar remains after direct costs. It does not include rent, salaries, or tax, which are covered by operating and net margins.

Worked example

For example, with revenue of $50,000 and cost of goods sold of $30,000, the gross profit is $20,000 and the margin is ($50,000 - $30,000) ÷ $50,000 × 100 = 40.00%.

FAQs

What is a healthy margin?
It varies widely by industry — compare with similar businesses.

Margin vs markup — what is the difference?
Margin is profit as a share of price; markup is profit as a share of cost.

Why track it over time?
Falling margin can signal rising costs or price pressure.

Are these figures financial advice?
No — they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.

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