Profit Margin Calculator

Calculate gross profit margin, net profit margin, and markup percentage from your revenue and cost figures. For illustrative purposes only.

Revenue

1,00010,000,000

Cost of Goods Sold (COGS)

010,000,000

Operating Expenses

05,000,000

Gross Profit$200,000

Gross Margin40.0%

Markup on Cost66.7%

Net Profit Margin20.0%

Profit Breakdown

Cost of Goods Sold

$300,000

Operating Expenses

$100,000

Net Operating Profit

$100,000

Net Operating Profit$100,000

Disclaimer

This calculator is for educational and illustrative purposes only. It does not constitute financial, investment, or tax advice. Results are estimates based on the inputs you provide and may not reflect actual returns. Consult a qualified financial advisor before making any investment decisions.

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Frequently Asked Questions

Gross profit margin is the percentage of revenue remaining after deducting the cost of goods sold (COGS). It is calculated as (Revenue − COGS) / Revenue × 100. A higher gross margin indicates more money retained per dollar of sales before operating costs are paid.

Margin is gross profit expressed as a percentage of the selling price. Markup is gross profit expressed as a percentage of cost. For the same transaction, markup is always a higher percentage than margin. For example, buying at $60 and selling at $100 gives a 40% margin but a 66.7% markup.

Net profit margin accounts for all expenses including operating costs (salaries, rent, utilities), taxes, and interest. It is calculated as Operating Profit / Revenue × 100. It provides a more complete picture of business profitability than gross margin alone.

Profit margins vary significantly by industry. Grocery retail often operates at 1–3% net margin. Software and technology companies may achieve 20–40%. A gross margin above 50% is generally considered strong. Compare your margins to industry benchmarks for a meaningful assessment.

Margins can be improved by increasing prices, negotiating lower COGS through better procurement, reducing operating expenses, improving operational efficiency, or shifting product mix toward higher-margin items.