Profit Margin Calculator

How it works

Profit margin is the share of every revenue dollar that survives as profit. A 35% margin on $100,000 of revenue means $35,000 of profit.

Margins are the language of pricing and business health: gross margin tells you how efficiently you make or source your product, and net margin tells you what survives after every operating cost. Mode switching on this page lets you compute either view without entering the same numbers twice.

Formula

Profit margin = Profit / Revenue

Gross margin uses gross profit (revenue minus cost of goods sold); net margin uses net profit after all costs.

Worked example

Example: revenue $100,000, total cost $65,000. Net profit = $35,000, so the net margin is 35%. If the $65,000 were purely cost of goods sold, that would be a 35% gross margin instead.

Gross Margin Calculator

Gross margin isolates the production story: how much of each dollar is left after the direct cost of making or buying the product. Watch it over time — a shrinking gross margin usually means input costs are rising or pricing power is fading.

Net Profit Margin Calculator

Net margin is the bottom line as a percentage. It tells you what actually survives after every cost, including operating expenses and taxes. A healthy net margin is the reward for controlling both the product cost and the overhead behind it.

FAQ

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