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Open Calculator โOverview
Profit margin tells you what percentage of revenue becomes profit. A business with high revenue but low margins can still fail.
The Formula
Gross Margin = (Revenue โ COGS) รท Revenue ร 100
Standard formula used by professionals worldwide
Worked Example
Step-by-step
Revenue 100,000 | Cost 60,000 โ Profit 40,000 โ Margin 40%
Key Concepts
- Accuracy: Results are as accurate as the inputs you provide
- Units: Always use consistent units throughout your calculation
- Verification: Double-check important calculations before making decisions
- Professional advice: For major financial, health, or structural decisions, consult a qualified professional
Privacy and Security
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- No data is sent to any server
- No sign-up or personal information required
- Your data stays private โ always
Frequently Asked Questions
Good profit margin?
Retail 5-20%. Software 60-80%. Services 20-50%.
Markup vs margin?
Markup on cost price. Margin on selling price. 50% markup is not 50% margin.
How to improve margin?
Reduce costs, increase prices, or sell higher-margin products.