Profit Margin Calculator
Calculate profit margin percentage and dollar profit from revenue and cost.
About the Profit Margin Calculator
Profit margin measures how much of every dollar of revenue a business actually keeps as profit after covering costs — a core number for pricing decisions, investor conversations, and comparing performance against competitors. This calculator turns revenue and total cost into a clear profit margin percentage and dollar profit figure.
How It Works
The calculator subtracts total cost from revenue to find dollar profit, then divides that profit by revenue to express it as a percentage. Margin is always measured against revenue, not cost, which is what distinguishes it from markup — a distinction that trips up many first-time business owners.
Profit = Revenue − Cost; Profit Margin (%) = Profit / Revenue × 100.
Example
Scenario: A business with $50,000 in revenue and $35,000 in total cost.
Result: Profit of $15,000 and a profit margin of 30%.
Assumptions & Limitations
- Cost is assumed to represent all costs attributable to the revenue being measured, including cost of goods sold.
- Revenue is assumed to be net of returns and discounts already applied.
- Does not separate gross margin from net margin — include only the costs relevant to the margin you want to measure.
- A single-period snapshot; trends over multiple periods often matter more than one number.