💸 Profit Margin Calculator
Work out your profit and margin in seconds. Enter your revenue and cost to see the gross profit, net profit and profit margin percentage instantly.
What is this tool?
Profit margin measures how much of every dollar of revenue a business keeps as profit after paying its costs. It is one of the most important numbers in business: a high margin means a business is efficient and has room to absorb shocks, while a thin margin means even a small rise in costs can wipe out the profit. Investors, owners and managers all watch margins closely, and so should anyone pricing a product or evaluating a side project. This calculator takes your revenue (total sales or income) and your cost (the total cost of goods sold or total expenses) and instantly returns three figures: the gross profit (revenue minus cost), the net profit (same figure when no further expenses are separated), and the profit margin as a percentage (profit divided by revenue, times 100). These are the core numbers behind every income statement and pricing decision. Everything runs locally in your browser, so your business figures stay private. The tool handles both profitable and loss-making scenarios, clearly showing a negative margin when costs exceed revenue, and it validates that your inputs are valid numbers before calculating.How it works
The profit is calculated as revenue minus cost. The profit margin percentage is the profit divided by the revenue, multiplied by 100 — this tells you how many cents of every dollar of revenue become profit. For example, if revenue is 10,000 and cost is 7,500, the profit is 2,500 and the margin is 25 percent, meaning 25 cents of every dollar of revenue is kept as profit. The calculator also handles the loss case. When cost exceeds revenue, the profit is negative (a loss) and the margin is negative, signalling that the business is losing money on every sale. The margin formula is the same either way: profit ÷ revenue × 100. The tool guards against a divide-by-zero error if revenue is entered as zero, and it accepts both whole numbers and decimals so you can work in any currency and at any scale.How to use
- Enter your total revenue (the full amount earned from sales).
- Enter your total cost (the cost of goods sold or total expenses).
- Press the Calculate button.
- Read the gross profit, net profit and profit margin percentage.
- A negative margin means your costs exceed your revenue — a loss.
Frequently Asked Questions
Frequently Asked Questions
What is a good profit margin?
It depends on the industry. Grocery stores often run on margins of 2 to 5 percent, software companies can exceed 70 percent, and the average across most small businesses is around 10 percent. The most useful comparison is against other companies in the same industry rather than against a single universal target.
What is the difference between gross and net profit?
Gross profit is revenue minus the direct cost of producing the goods or services sold. Net profit subtracts all other operating expenses (rent, salaries, marketing, taxes) as well. This calculator treats your single cost input as the total cost, so the profit shown is effectively the net profit for the figures you entered.
Why is my margin negative?
A negative margin means your costs are higher than your revenue, so the business is losing money on every sale. The calculator shows the loss as a negative profit and a negative margin so you can see at a glance that the current pricing or cost structure is not sustainable.
Does this work for services as well as products?
Yes. The calculation is the same whether you sell physical goods or services. Enter your total revenue from the service and the total cost of delivering it (including labour, materials and overheads), and the calculator shows the profit and margin exactly as it would for a product.
Tips & Advice
When comparing margins, always compare like with like — a 5 percent margin might be excellent in groceries but poor in software, so benchmark against your own industry. Raising prices usually improves margin more effectively than cutting costs, because every dollar of extra revenue flows almost directly to profit once fixed costs are covered. Watch out for the difference between margin and markup: a 50 percent markup on a 100 dollar cost gives a 150 dollar price and a 33 percent margin, not a 50 percent margin, and confusing the two is a classic pricing mistake. If your margin is shrinking over time, the cause is usually rising costs rather than falling prices, so track both inputs separately. For multi-product businesses, calculate the margin for each product individually so you can see which lines are actually making money.
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