When to use this calculator
Calculate gross profit as a percentage of revenue. Use revenue and related costs for the same goods and period.
Explore the pricing & break-even calculators for other questions in this topic. For a related calculation, use the Profit Per Unit Calculator: Find the monetary difference between unit revenue and an entered unit cost.
PUTTING IT INTO PRACTICE
Profit Margin: a worked example
The values below are an illustrative example, not a recommendation. Replace them with measurements or assumptions that match your question.
| Input | Example value |
|---|---|
| Revenue | 1,000 |
| Cost of goods sold | 650 |
| Result | 35 % |
- Check the input labels and enter the example values above.
- Apply the relationship: Margin (%) = (revenue − cost) ÷ revenue × 100.
- The result is 35 %, rounded for display.
How to interpret your result
Use revenue and related costs for the same goods and period.
Margin uses sales revenue as its denominator, while markup uses cost. Contribution deducts variable costs before fixed costs. Break-even calculations assume the same prices, variable costs and product mix remain in place.
Frequently asked questions
Why are margin and markup percentages different?
They use different bases. The same monetary profit is divided by selling price for margin and by cost for markup.
How do I use the profit margin calculator?
Enter revenue, cost of goods sold. The result updates automatically. Use the units shown beside each input; the example values illustrate the method.
Which formula does this calculator use?
Margin (%) = (revenue − cost) ÷ revenue × 100.
What should I check before using the result?
Use revenue and related costs for the same goods and period.
How are results rounded?
Scalar numbers display up to six decimal places, with scientific notation for very large or small values. Text, fraction, date and schedule outputs use the format described on the tool. Intermediate calculations use JavaScript floating-point arithmetic. Keep sensible precision for your measurements.
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