The method
How it is worked out
Net margin = R − COGS − OpEx − OtherR × 100
- R
- Revenue
- COGS
- Cost of goods sold
- OpEx
- Operating expenses
- Other
- Other costs and taxes
Profit Margin Calculator
Calculate net profit and profit margin from revenue and total costs. The result updates as you type so you can compare scenarios quickly.
Keep in mind
What it leaves out
- Industry normsA good margin in retail is a poor one in software. Compare with your sector.
- TimingAccounting profit and cash in the bank aren't the same thing.
- One-offsUnusual costs or gains in the period distort the margin.
Use the calculator to compare scenarios rather than as a guaranteed forecast.
About the Profit Margin Calculator
See what share of a business's sales remains after direct costs, operating expenses and other costs. The calculator gives gross, operating and net figures so a founder can identify which layer of spending has the largest effect on profitability.
How it works and an example to tryShow less
How to use the result
Subtract cost of goods sold from revenue for gross profit, then operating expenses for operating profit and other costs and taxes for net profit. Each margin is the relevant profit divided by revenue. Inputs must cover the same accounting period; the tool does not reconcile cash flow or define which items your accounts classify as operating costs.
Example to try
Model a coffee shop with 240,000 in annual sales, then enter ingredients, staff and other running costs into the appropriate fields. Compare gross and net margins after increasing one cost. A healthy gross margin does not protect the business from excessive overheads.
Put it to work
Try it on a real situation
Load an example
What moves the result most
Worked out from your figures above. Tap a row to try it.
Who uses it, and when
Founders preparing a pitch, café and shop owners checking whether a busy year was a profitable one, and finance teams reviewing which layer of cost is squeezing the business.
Mistakes worth avoiding
- Mixing periods, such as a month of revenue against a quarter of costs.
- Classifying costs inconsistently between direct and operating.
- Celebrating a strong gross margin while overheads quietly consume the net.
Questions
What does the Profit Margin Calculator do?
Calculate net profit and profit margin from revenue and total costs.
How should I use the result?
Subtract cost of goods sold from revenue for gross profit, then operating expenses for operating profit and other costs and taxes for net profit. Each margin is the relevant profit divided by revenue. Inputs must cover the same accounting period; the tool does not reconcile cash flow or define which items your accounts classify as operating costs.
Does TechBullion store the information I enter?
The core calculation or transformation runs in your browser. Normal website security and analytics may still record page-level events, but the tool does not need to create a public record from your inputs.
What mistakes do people make with a profit margin calculator?
Mixing periods, such as a month of revenue against a quarter of costs. Classifying costs inconsistently between direct and operating. Celebrating a strong gross margin while overheads quietly consume the net.
Is the result guaranteed?
No. Use the result as a practical check or planning aid and verify important decisions with the relevant primary source, provider or professional advice.
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Calculator results are estimates based on the figures entered and are not financial, investment, legal or tax advice.