profit margin calculator

Profit Margin Calculator

Margin %: 0%
Markup %: 0%
Profit $: 0.00

How to Use the Profit Margin Calculator

  1. Enter Revenue:
    • Input your revenue amount in the “Revenue” field.
  2. Enter Cost:
    • Input your cost amount in the “Cost” field.
  3. View Results:
    • Margin %, Markup %, and Profit $ will be calculated and displayed automatically.
  4. Reset Calculator:
    • Click the “Reset Calculator” button to clear all fields and reset the values.

About Profit Margin

What is Profit Margin?

Profit margin is a financial metric that shows the percentage of revenue that exceeds the cost of goods sold (COGS). It indicates how efficiently a company is managing its expenses relative to its sales.

How to Calculate Profit Margin:

Use the formula:

Profit Margin = ((Revenue - Cost) / Revenue) × 100

Examples of Specific Margins:

  • 33% Profit Margin:

    Revenue = Cost / (1 - 0.33)

  • 40% Profit Margin:

    Revenue = Cost / (1 - 0.4)

Calculating Percentage of Profit (Markup):

Percentage of Profit = (Profit / Cost) × 100

What is a Good Profit Margin?

A good profit margin varies by industry. Generally, margins above 10-20% are considered healthy. Compare your margins to industry averages and competitors to gauge financial health.

Calculating Profit Margin in Excel:

  1. Enter Data:
    • Cell A1: Revenue
    • Cell B1: Cost of Goods Sold (COGS)
  2. Calculate Profit:

    Cell C1: =A1-B1

  3. Calculate Profit Margin:

    Cell D1: =C1/A1

  4. Format as Percentage:

    Select cell D1, right-click, choose "Format Cells," and select percentage format.

Now, the value in cell D1 represents your profit margin in percentage format.

About Profit Margin

What is Profit Margin? Profit margin is a financial metric that shows the percentage of revenue that exceeds the cost of goods sold (COGS). It indicates how efficiently a company is managing its expenses relative to its sales.

How to Calculate Profit Margin: Use the formula: Profit Margin=(Revenue−CostRevenue)×100\text{Profit Margin} = \left( \frac{\text{Revenue} – \text{Cost}}{\text{Revenue}} \right) \times 100

Examples of Specific Margins:

  • 33% Profit Margin: Revenue=Cost1−0.33\text{Revenue} = \frac{\text{Cost}}{1 – 0.33}
  • 40% Profit Margin: Revenue=Cost1−0.4\text{Revenue} = \frac{\text{Cost}}{1 – 0.4}

Calculating Percentage of Profit (Markup): Percentage of Profit=(ProfitCost)×100\text{Percentage of Profit} = \left( \frac{\text{Profit}}{\text{Cost}} \right) \times 100

What is a Good Profit Margin? A good profit margin varies by industry. Generally, margins above 10-20% are considered healthy. Compare your margins to industry averages and competitors to gauge financial health.

Calculating Profit Margin in Excel:

  1. Enter Data:
    • A1: Revenue
    • B1: Cost of Goods Sold (COGS)
  2. Calculate Profit:
    • C1: =A1-B1
  3. Calculate Profit Margin:
    • D1: =C1/A1
  4. Format as Percentage:
    • Select D1, right-click, choose “Format Cells,” and select percentage format.

Now, D1 shows your profit margin as a percentage.