Profit Margin Calculator
Estimate your gross and net margins in seconds. Enter revenue and costs to see margin percentages, break-even points, and quick insights you can share with your team.
What is Profit Margin?
Profit margin is a financial ratio that measures how much profit a company earns relative to its revenue. It shows what percentage of revenue remains after covering costs.
Profit Margin Formula
The formula used in this calculator is:
Profit = Revenue – Cost
Profit Margin = (Profit ÷ Revenue) × 100
This gives you the percentage of profit earned from total revenue.
Example Calculation
If your revenue is $10,000 and your costs are $7,000:
Profit = 10,000 – 7,000 = 3,000
Profit Margin = (3,000 ÷ 10,000) × 100 = 30%
This means your business keeps 30% profit.
Why Profit Margin is Important
- Helps measure business efficiency
- Shows financial health
- Helps pricing decisions
- Important for investors
- Compares performance with competitors
Who Should Use This Calculator?
- Freelancers
- E-commerce sellers
- SaaS founders
- Small businesses
- Startup founders
- Retail store owners
General FAQ
Frequently Asked Questions
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What is a good profit margin?
A good profit margin depends on the industry, but generally 10–20% is considered healthy.
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What does negative profit margin mean?
It means your expenses are higher than revenue, resulting in a loss.
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How can I increase my profit margin?
You can increase profit margin by reducing costs, increasing pricing, improving operational efficiency, and increasing sales volume.