Profit Margin Calculator - Free Online Calculator
Profit margin measures how much money remains after covering costs. Use gross margin to evaluate product economics, operating margin to judge efficiency, and net margin to see true profitability.
Even a small change in price, supplier cost, or overhead can move net margin significantly. Use the calculator to test scenarios before changing pricing or promotions.
Combine this tool with break-even and inventory turnover calculators to understand both profitability and cash flow impact.
Frequently Asked Questions
Q: How do I calculate profit margin?
Profit margin = Profit ÷ Revenue × 100. Use gross profit for gross margin, operating profit for operating margin, and net profit for net margin.
Q: What is the difference between markup and margin?
Markup divides profit by cost, while margin divides profit by revenue. A 33.3% margin equals a 50% markup.
Q: Which costs should be in COGS?
Include direct costs such as materials, direct labor, packaging, and other expenses tied to production or service delivery.
Q: Is profit margin the same as profit percentage?
Profit percentage usually refers to margin, but some people mean markup. This calculator reports margins to match financial statements.
Q: What is a good profit margin in India?
It varies by industry. Retail often ranges 3-8%, restaurants 8-15%, manufacturing 10-20%, and services can exceed 20%.
Q: Can I use this calculator for GST-inclusive pricing?
Yes. Use consistent numbers—either GST-inclusive for both revenue and costs or GST-exclusive for both.