Profit Margin Calculator
Instant Results ⚡
Calculate your gross profit margin from revenue and cost of goods sold. Instant results for smarter business decisions.
Calculate your gross profit margin from revenue and cost of goods sold. Instant results for smarter business decisions.
Profit margin measures how much of your revenue is left over as profit after covering costs. It is expressed as a percentage of the revenue (selling price) — this is what distinguishes it from markup, which is based on cost. Gross profit margin is one of the most important financial metrics for any business, showing at a glance how efficiently it converts sales into profit.
Formula:
Gross Profit = Revenue − Cost
Profit Margin = (Gross Profit ÷ Revenue) × 100
Example 1
Revenue £150, Cost £100 → Profit £50 → Margin 33.33%
Example 2
Revenue £500, Cost £350 → Profit £150 → Margin 30%
Example 3
Revenue £1000, Cost £600 → Profit £400 → Margin 40%
What is a good profit margin?
It depends on your industry. Grocery retail typically runs 2–5%, software businesses
can exceed 70%, and professional services often sit between 20–40%. Compare your margin
to industry benchmarks for context.
What is the difference between gross and net profit margin?
Gross profit margin only deducts the direct cost of goods sold. Net profit margin also
deducts operating expenses, taxes, and interest — giving the true bottom-line profitability.
This calculator computes gross margin.
Can profit margin be negative?
Yes. A negative margin means you are selling for less than your cost — you are making a loss
on every sale. This calculator will show this clearly.