Profit Margin Calculator
Calculate profit margins
Frequently Asked Questions
How do I calculate profit margin?
Profit Margin = ((Revenue - Cost) ÷ Revenue) × 100. Revenue $100, cost $70: ($100 - $70) ÷ $100 × 100 = 30% margin. The calculator computes gross, operating, and net profit margins.
What is a good profit margin for a business?
Varies by industry. Software/SaaS: 70-90% gross, 20-40% net. Retail: 25-50% gross, 2-5% net. Manufacturing: 25-35% gross, 5-10% net. Services: 50-70% gross, 15-25% net. Compare within your industry for benchmarks.
What is the difference between gross and net profit margin?
Gross margin = (Revenue - COGS) / Revenue. Only considers direct costs. Net margin = (Revenue - All Expenses) / Revenue. Includes overhead, taxes, interest. A business can have 60% gross margin but only 10% net margin.
How do I calculate the selling price for a target profit margin?
Price = Cost ÷ (1 - Target Margin). For 40% margin on $30 cost: $30 ÷ 0.60 = $50. For 25% margin: $30 ÷ 0.75 = $40. The calculator reverse-calculates price from cost and desired margin.
How do I improve my profit margin?
Increase prices (test elasticity). Reduce COGS (negotiate with suppliers, buy in bulk). Cut overhead (automate, reduce waste). Improve product mix (sell more high-margin items). The calculator helps model different pricing scenarios.