Profit Margin Calculator

Subtract costs from revenue to get profit. Divide that profit by revenue and multiply by 100. For $100 of revenue and $60 of cost, profit is $40 and profit margin is 40%.

Profit equals revenue minus cost. The meaning of the result depends on which costs you include: COGS gives gross profit, operating costs give operating profit, and all relevant expenses give net profit.

Convert margin to a decimal and divide profit by it. A $40 profit at a 40% margin implies $40 ÷ 0.40 = $100 of revenue. Profit and margin must have compatible signs, and a zero margin cannot determine revenue from profit alone.

Multiply revenue by one minus the margin rate. At $100 of revenue and a 40% margin, cost is $100 × (1 − 0.40) = $60.

Yes. A negative margin means included costs exceed revenue. Revenue of $100 and cost of $120 creates a −$20 profit and a −20% margin.

Not when revenue and cost are both nonnegative and profit is revenue minus cost. A 100% margin already implies zero included cost. Metrics built from gains, subsidies, negative costs, or different accounting definitions may behave differently.

Subtract cost of goods sold from net sales to get gross profit. Then divide gross profit by net sales and multiply by 100. Use consistent periods and the company's reported classification of COGS.

Gross profit is a currency amount: net sales minus COGS. Gross margin expresses that gross profit as a percentage of net sales, which makes different periods or businesses easier to compare.

Use the costs the business classifies as directly tied to producing or delivering the goods or services sold. Classification varies by industry and accounting policy, so use the reported financial statements when analyzing a public company.

Gross margin subtracts COGS from sales. Net margin uses net income after operating expenses, interest, taxes, and other included items. They describe different layers of profitability and should not be compared as if they were the same metric.

Operating margin goes further down the income statement by subtracting operating expenses from gross profit. It reflects the economics of running the business before financing and tax, subject to the company's reporting definitions.

Yes when the business reports a meaningful cost of revenue or cost of services. Compare companies only after checking that they classify delivery labor, hosting, support, and similar costs in comparable ways.

Margin divides profit by revenue; markup divides profit by cost. With a $60 cost and $100 selling price, margin is 40% while markup is 66.67%.

Convert markup to a decimal, then divide it by one plus itself. A 50% markup becomes 0.50 ÷ 1.50 = 33.33% margin.

Convert margin to a decimal, then divide it by one minus itself. A 40% margin becomes 0.40 ÷ 0.60 = 66.67% markup.

Divide cost by one minus the target margin expressed as a decimal. A $60 cost at a 40% target margin needs a $100 selling price. Using a 40% markup instead would produce only an $84 price.

Markup divides profit by cost, so zero cost creates division by zero. Margin can still be calculated from positive revenue, but the calculator displays a dash for markup rather than inventing a percentage.

There is no universal good margin. Capital intensity, competition, recurring revenue, product mix, accounting choices, and the stage of the business all matter. Compare the same metric over time and against genuinely similar companies.

Use the same margin definition, reporting period, currency treatment, and business segment where possible. Review several periods and read the financial-statement notes for reclassifications or unusual items.

No. A higher margin can reflect pricing power and efficiency, but it can also be temporary or result from underinvesting, favorable product mix, asset sales, or accounting changes. Growth, cash conversion, durability, and reinvestment needs provide necessary context.

No. The calculation runs in your browser and inputs are not sent to a server. A copied link can contain the two values you chose, so review it before sharing if the figures are sensitive.

No. It performs arithmetic on your inputs. It does not verify financial statements, choose an accounting definition, value a stock, or recommend an investment.