Profit Margin Calculator

Profit Margin is evaluated from Revenue, Cost of Goods Sold and Operating Expenses. The calculation reports Gross Profit, Gross Profit Margin and Markup Percentage.

Results

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About the Profit Margin Calculator

Profit Margin is treated here as a quantitative relation between Revenue, Cost of Goods Sold and Operating Expenses and Gross Profit, Gross Profit Margin, Markup Percentage and Net Profit.

The calculator uses a multi formula configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.

Formula basis:
Gross Profit = Revenue - COGS
Gross Margin (%) = Gross Profit / Revenue x 100
Markup (%) = Gross Profit / COGS x 100
Net Profit = Revenue - COGS - Operating Expenses
Net Margin (%) = Net Profit / Revenue x 100

Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.

Formula & How It Works

The calculation applies the following relations exactly as recorded in the metadata:

Gross Profit = Revenue - COGS
Gross Margin (%) = Gross Profit / Revenue x 100
Markup (%) = Gross Profit / COGS x 100
Net Profit = Revenue - COGS - Operating Expenses
Net Margin (%) = Net Profit / Revenue x 100

Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.

Worked Examples

Example 1: Small retail shop: $10,000 monthly sales, $6,000 COGS, $2,000 operating expenses

Inputs

revenue: 10000 cogs: 6000 operating_expenses: 2000

Gross Profit: $4,000. Gross Profit Margin: 40%. Markup Percentage: 66.67%. Net Profit: $2,000. Net Profit Margin: 20%

With Revenue = 10,000, Cost of Goods Sold = 6,000 and Operating Expenses = 2,000 as the stated inputs, the result is Gross Profit = $4,000, Gross Profit Margin = 40% and Markup Percentage = 66.67%. Each value corresponds to the declared output fields.

Example 2: Restaurant: $50,000 monthly revenue, $18,000 food/beverage cost, $25,000 labor+overhead

Inputs

revenue: 50000 cogs: 18000 operating_expenses: 25000

Gross Profit: $32,000. Gross Profit Margin: 64%. Markup Percentage: 177.78%. Net Profit: $7,000. Net Profit Margin: 14%

With Revenue = 50,000, Cost of Goods Sold = 18,000 and Operating Expenses = 25,000 as the stated inputs, the result is Gross Profit = $32,000, Gross Profit Margin = 64% and Markup Percentage = 177.78%. Each value corresponds to the declared output fields.

Example 3: SaaS startup: $100,000 MRR, $15,000 hosting/infrastructure, $40,000 S&M/G&A

Inputs

revenue: 100000 cogs: 15000 operating_expenses: 40000

Gross Profit: $85,000. Gross Profit Margin: 85%. Markup Percentage: 566.67%. Net Profit: $45,000. Net Profit Margin: 45%

With Revenue = 100,000, Cost of Goods Sold = 15,000 and Operating Expenses = 40,000 as the stated inputs, the result is Gross Profit = $85,000, Gross Profit Margin = 85% and Markup Percentage = 566.67%. Each value corresponds to the declared output fields.

Example 4: Amazon seller: $5,000 in sales, $2,200 product cost, $1,200 Amazon fees+shipping+ads

Inputs

revenue: 5000 cogs: 2200 operating_expenses: 1200

Gross Profit: $2,800. Gross Profit Margin: 56%. Markup Percentage: 127.27%. Net Profit: $1,600. Net Profit Margin: 32%

With Revenue = 5,000, Cost of Goods Sold = 2,200 and Operating Expenses = 1,200 as the stated inputs, the result is Gross Profit = $2,800, Gross Profit Margin = 56% and Markup Percentage = 127.27%. Each value corresponds to the declared output fields.

Common Use Cases

Calculate gross profit margin for a product
Determine if a product's pricing is profitable
Compare margins across different product lines