Business

Profit Margin Calculator

Calculate gross and net profit margin as a percentage from revenue and costs.

Calculation Mode

Revenue / Sales ($)

Cost ($)

Profit Margin Analysis

Revenue / Sales$1000.00

Cost of Goods Sold$600.00

Profit$400.00

Profit Margin %40.00%

📊 Margin Breakdown

Revenue %100%

Cost %60.0%

Profit %40.00%

📝 Profit Margin Examples

$1,000 revenue, $600 cost40% margin, $400 profit

$5,000 revenue, $3,500 cost30% margin, $1,500 profit

$10,000 revenue, $7,000 cost30% margin, $3,000 profit

$2,000 revenue, $500 cost75% margin, $1,500 profit

🏢 Typical Industry Profit Margins

Grocery Stores2-4%

E-commerce / Retail5-15%

Technology15-30%

Software60-90%

Professional Services20-40%

💡 Profit Margin Tips

• Profit margin shows profitability as a percentage of sales
• Higher margins = more profit from each sale
• Different industries have different normal margins
• Track margins over time to assess business health
• Don't confuse profit margin with markup
• Operating expenses should be included in COGS for accurate margins

📋 Markup vs Profit Margin

Markup: Profit expressed as % of cost (e.g., 100% markup on $50 = $100 price)

Profit Margin: Profit expressed as % of revenue (e.g., 50% margin = $50 profit on $100 sale)

Formula

Profit = Revenue - Cost

Profit Margin % = (Profit / Revenue) × 100

How it works

Formula

Profit = Revenue - Cost

Profit Margin % = (Profit / Revenue) × 100

Examples:
$1,000 revenue, $600 cost:
Profit = $1,000 - $600 = $400
Margin = ($400 / $1,000) × 100 = 40%

$5,000 revenue, $3,500 cost:
Profit = $5,000 - $3,500 = $1,500
Margin = ($1,500 / $5,000) × 100 = 30%

The profit margin calculator shows the profitability of your business as a percentage of sales. Enter revenue and cost to calculate profit and profit margin percentage. Three calculation modes: revenue+cost, revenue+margin, or cost+margin.

Why this matters

Profit margin is a key indicator of business health and efficiency. A higher profit margin means more profit from each dollar of sales. Essential for pricing strategy, competitive analysis, and investor evaluation.

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