Free Profit Margin Calculator
Calculate net profit margin from total revenue and total costs. Determine what percentage of revenue becomes profit after all expenses.
USD
USD
Profit Margin
20.00%
Net Profit$30,000.00
Cost-to-Revenue Ratio80.00%
Profit Margin vs Total Revenue
How to Calculate Profit Margin
Formula
Profit Margin % = [(Revenue - Total Costs) / Revenue] x 100
Profit margin is one of the most critical measures of business health. It shows how much of each dollar in revenue your business keeps as profit after paying all expenses.
Example Calculation
A business earns $150,000 in revenue with $120,000 in total costs.
- 01Net profit = $150,000 - $120,000 = $30,000
- 02Profit margin = ($30,000 / $150,000) x 100 = 20%
- 03Cost-to-revenue ratio = ($120,000 / $150,000) x 100 = 80%
Frequently Asked Questions
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How to Calculate Profit Margin
Learn how to calculate gross, operating, and net profit margins step by step. Understand what healthy margins look like across industries and how to improve yours.