How to Calculate Profit Margin
Calculate profit margin from revenue and cost.
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Quick answer
Profit margin shows how much of the selling price remains as profit. It is calculated as profit divided by selling price, multiplied by 100.
Step-by-step
- Write down the values you already know.
- Use the correct formula and keep the units consistent.
- Calculate the result and check whether it makes practical sense.
Use the calculator
The easiest way to avoid mistakes is to use the related calculator and then review the formula shown on the page.
Open Profit Margin Calculator →
Common mistakes
- Using the wrong unit or percentage format.
- Rounding too early.
- Forgetting extra costs, waste, taxes, or allowances where they apply.
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