Profit Margin Calculator
Calculate profit margin percentage
About This Calculator
The Profit Margin Calculator calculates your profit margin percentage, which shows what percentage of revenue is profit. This is a key metric for evaluating business profitability and financial health.
How It Works
- 1
Enter your total revenue (sales).
- 2
Input your total costs (all expenses).
- 3
The calculator computes profit amount and profit margin percentage.
Formula Explanation
Profit = Revenue - CostsSubtract total costs from revenue to calculate profit (or loss if negative).
Profit Margin % = (Profit / Revenue) × 100Divide profit by revenue and multiply by 100 to get profit margin as a percentage.
Tips
Higher profit margins indicate better profitability.
Profit margins vary by industry - compare to industry averages.
Gross profit margin uses only cost of goods sold, while net profit margin uses all costs.
Aim to improve profit margins by increasing revenue or reducing costs.