How to use this profit margin calculator
Enter values from the same reporting period and use consistent definitions. Then select Calculate. The tool performs the calculation locally in your browser and shows the result immediately.
Formula
Profit Margin = ((Revenue − Costs) ÷ Revenue) × 100
Example
With $5,000 revenue and $3,800 in costs, profit is $1,200 and profit margin is 24%.
What this metric tells you
Profit margin expresses the amount left from each revenue dollar after the costs you choose to include. It makes comparisons easier across different sales volumes.
How to interpret the result
- State which costs are included whenever sharing the margin.
- Gross margin, contribution margin and net margin are not interchangeable.
- Compare like-for-like periods and definitions.
Important: Calculators provide estimates based on the inputs you supply. They do not replace platform reporting, accounting records, tax advice or professional financial analysis.
Frequently asked questions
What is the difference between profit and margin?
Profit is an amount of money. Margin expresses profit as a percentage of revenue.
Can margin be negative?
Yes. If costs exceed revenue, profit and margin are negative.
Is margin the same as markup?
No. Margin uses selling price/revenue as the denominator; markup uses cost as the denominator.