Profit Margin Calculator
Calculate gross, operating, and net profit margins from revenue and costs.
🔢
Profit Margin Calculator
Use the formula and worked example below to calculate manually.
Overview
The profit margin calculator computes gross, operating, and net profit margins from your revenue and costs — the key metrics that reveal how much of every rupee earned flows through to profit.
How to use this calculator
- Enter the revenue (total sales).
- Enter the cost of goods sold (COGS).
- Optionally enter operating expenses and taxes for operating and net margin.
- The calculator shows all three margin levels as percentages.
Understanding the inputs & results
Revenue
Total sales or income generated by the business.
COGS (Cost of Goods Sold)
Direct costs of producing the goods or services sold.
Gross profit
Revenue minus COGS.
Gross margin
Gross profit / Revenue × 100.
Operating margin
(Revenue − COGS − Operating expenses) / Revenue × 100.
Net margin
Net profit (after tax and interest) / Revenue × 100.
Markup
Profit as a percentage of cost (different from margin which is profit as % of selling price).
The formula
Profit margin formulas
Gross margin = (Revenue − COGS) / Revenue × 100 | Net margin = Net profit / Revenue × 100
Margin is always expressed as a percentage of revenue. Markup is expressed as a percentage of cost: Markup % = (Price − Cost) / Cost × 100.
Worked example
Revenue ₹10,00,000. COGS ₹6,00,000. Operating expenses ₹2,00,000. Tax ₹60,000.
- Gross profit = 10L − 6L = ₹4L. Gross margin = 40%.
- Operating profit = 4L − 2L = ₹2L. Operating margin = 20%.
- Net profit = 2L − 60K = ₹1.4L. Net margin = 14%.
✓ Gross margin 40%, Operating margin 20%, Net margin 14%.
Frequently asked questions
Profit margin figures depend on accurate accounting of revenues and costs. Consult a chartered accountant for regulatory reporting.