How to Calculate Profit Margin
What is Profit Margin?
A profit margin calculator computes gross, operating, and net profit margins — the key measures of how efficiently a business converts revenue into profit.
Formula
Step-by-Step Guide
- 1Gross margin = (Revenue − COGS) / Revenue × 100
- 2Operating margin = Operating profit / Revenue × 100
- 3Net margin = Net profit / Revenue × 100
- 4Higher margins = more profit retained per £ of sales
Worked Examples
Frequently Asked Questions
What is Profit Margin?
A profit margin calculator computes gross, operating, and net profit margins — the key measures of how efficiently a business converts revenue into profit. Use this calculator for accurate, instant results.
How accurate is the Profit Margin calculator?
The calculator uses the standard published formula for profit margin. Results are accurate to the precision of the inputs you provide. For financial, medical, or legal decisions, always verify with a qualified professional.
What units does the Profit Margin calculator use?
This calculator works with inches, British pounds. You can enter values in the units shown — the calculator handles all conversions internally.
What formula does the Profit Margin calculator use?
The core formula is: Gross margin = (Revenue − COGS) / Revenue × 100. Each step in the calculation is shown so you can verify the result manually.
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