Question 1

What is profit margin?

Accepted Answer

Profit margin is profit expressed as a percentage of revenue. It tells you how much of each unit of sales is kept as profit after the costs you include. A 30% margin means 30% of revenue remains as profit.

Question 2

What is the difference between gross and net margin?

Accepted Answer

Gross margin uses only the cost of goods sold (COGS) — the direct cost of producing what you sell. Net margin subtracts all costs, including operating expenses, interest and taxes. In this calculator, enter COGS for gross margin or total costs for net margin.

Question 3

What is the profit margin formula?

Accepted Answer

Profit = Revenue − Cost, and Margin% = Profit ÷ Revenue × 100. For example, revenue of 10,000 with costs of 7,000 gives a profit of 3,000 and a margin of 30%.

Question 4

How is margin different from markup?

Accepted Answer

Margin is profit as a percentage of revenue, while markup is profit as a percentage of cost. Markup is always the larger number because cost is smaller than revenue. This calculator shows both so you can compare them.

Question 5

What is a good profit margin?

Accepted Answer

There is no single answer — a good margin varies widely by industry. High-volume retail often runs on thin margins, while software or services can have very high margins. Compare against peers in your own sector rather than a universal benchmark.

Question 6

Are these figures guaranteed or an estimate?

Accepted Answer

The result is an estimate based on the revenue and cost figures you enter. It depends on which costs you include and does not replace proper accounting. Treat the output as a planning estimate.

Profit Margin Calculator

Profit Margin Calculator

Results Breakdown

What is profit margin?

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