Profit Margin Calculator — Calculate Gross & Net Margin
Free profit margin calculator. Calculate gross and net profit margin from revenue and costs instantly.
Formula: (Revenue - Cost) / Revenue × 100
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What Is This Calculator?
Profit margin measures how much profit a business makes for every dollar of revenue. Gross profit margin looks at revenue minus cost of goods sold, while net profit margin accounts for all expenses including overhead, taxes, and interest. It is one of the most important indicators of business health.
How to Calculate
To calculate profit margin: 1) Determine your total revenue. 2) Subtract your costs (cost of goods sold for gross margin, or all expenses for net margin). 3) Divide the profit by revenue. 4) Multiply by 100 to get a percentage. Formula: Profit Margin = (Revenue − Cost) / Revenue × 100.
Examples
Example: Your business earns $50,000 in revenue with $30,000 in costs. Profit = $20,000. Profit Margin = $20,000 / $50,000 × 100 = 40%. A 40% margin means you keep $0.40 in profit for every dollar earned.
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Accounting software like QuickBooks or FreshBooks can automatically track your margins over time and alert you to trends.
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