Profit Margin Calculator
Calculate your gross and net profit margin from revenue and costs.
Gross Profit
$4,000.00
Gross Margin
40.00%
Net Profit
$2,000.00
Net Margin
20.00%
Revenue composition
- COGS
- Total Expenses
- Net Profit
Next decision
Break-even CalculatorFind the sales volume needed to cover your fixed costs.How to use
- Enter total revenue.
- Enter cost of goods sold (COGS).
- Optionally add operating expenses and other costs under Advanced Options.
- Review your gross and net margins.
How it works
- Gross Profit = Revenue − COGS
- Gross Margin = Gross Profit ÷ Revenue × 100
- Net Profit = Gross Profit − Operating Expenses − Other Costs
- Net Margin = Net Profit ÷ Revenue × 100
Assumptions & scope
- Results depend entirely on the numbers entered.
- Enter COGS, operating expenses, and other costs for the same period as revenue, without double-counting.
- This is a business-planning calculator, not tax, accounting, legal, or financial advice.
FAQs
What is the difference between gross margin and net margin?
Gross margin only subtracts the direct cost of what you sold (COGS). Net margin also subtracts operating expenses and other costs, so it shows how much of each revenue dollar remains after all the costs you entered.
What costs should I include in operating expenses?
Ongoing costs of running the business that are not part of COGS, such as rent, salaries, software, marketing, and utilities. Use the same time period as your revenue, and avoid counting a cost in both COGS and operating expenses.
What does a negative profit margin mean?
Your costs for the period are higher than your revenue, so you are operating at a loss. The margin shows how large that loss is relative to revenue; lowering costs or raising prices or volume are the usual levers to review.