Profit Margin Calculator — Calculate Gross Profit Margin
Our Profit Margin Calculator helps you understand the profitability of your products and business. Profit margin is one of the most important financial metrics — it tells you how much of every dollar in revenue becomes actual profit. Whether you're analyzing a single product, setting prices, or evaluating your overall business performance, this tool gives you instant insights.
Switch between two modes: Revenue & Cost (enter revenue and COGS to find your margin) or Margin & Revenue (enter target margin and revenue to find required COGS). The visual margin bar shows you at a glance how profitable your business is.
The Profit Margin Formula
How to Use the Profit Margin Calculator
- Choose calculation modeSelect Revenue Choose calculation modeSelect Revenue Select Revenue & Cost Cost Cost to calculate margin from your numbers, or Margin & Revenue to find required costs for a target margin.
- Enter your valuesInput revenue and cost of goods sold (COGS), or revenue and target margin percentage.
- Click CalculateSee your profit margin, gross profit, and markup percentage instantly with a visual bar chart.
Frequently Asked Questions
A "good" margin varies by industry: software companies often have 70-90% margins, retail typically 25-50%, restaurants 3-9%, and manufacturing 25-35%. Generally, 5% is low, 10% is healthy, 20% is high, and 30%+ is excellent. Compare your margin to industry benchmarks.
Margin is profit as a percentage of revenue: (Price - Cost) / Price. Markup is profit as a percentage of cost: (Price - Cost) / Cost. A 40% margin equals a 66.7% markup. Both measure profitability, but from different perspectives.
Key strategies: Increase prices (if market allows), reduce costs (negotiate with suppliers, improve efficiency), focus on high-margin products, reduce waste, and increase volume to spread fixed costs. Even small improvements in margin can significantly boost profits.
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