Profit Margin Calculator

Profit margin is the percentage of income remaining after costs are deducted from sales revenue. The higher the number, the more profit your business generates.

To calculate profit margin, first subtract the cost from revenue to get the profit amount. Then divide the profit by revenue and multiply by 100 to get the percentage: ((Revenue - Cost) / Revenue) × 100

A good profit margin varies by industry. Generally, 5% is low, 10% is average, and 20% is considered high. However, some industries like luxury goods can have margins over 50%, while others like grocery stores typically have lower margins around 2-3%.

Gross profit margin only considers the direct costs of goods sold, while net profit margin includes all business expenses including overhead, taxes, and interest. Net profit margin gives a more complete picture of business profitability.