Profit Margin Calculator
Find gross profit, margin %, and markup % from revenue and cost of goods sold.
Written by Golam Rabbani, Founder & Lead Engineer
How to use this profit margin calculator
- Enter the revenue (the selling price) for the period or transaction.
- Enter the cost of goods sold (COGS) — the direct cost to produce or buy the item.
- Pick a currency for the labels.
- Press Calculate to see gross margin %, profit, and equivalent markup %.
- Use Copy to grab the breakdown, or Reset to start over.
About this profit margin calculator
Gross profit margin shows what fraction of revenue you keep after the direct cost of the goods sold. The formula is: gross margin % = (revenue − cost) ÷ revenue × 100; profit = revenue − cost. The tool also computes the equivalent markup on cost: markup % = (revenue − cost) ÷ cost × 100. These definitions are the standard ones in the U.S. SEC's Investor.gov primer on income statements and in Investopedia's "Gross Profit Margin" reference.
Worked example: revenue of USD 200 against a cost of goods sold of USD 80. Profit = 200 − 80 = USD 120. Gross margin = 120 ÷ 200 × 100 = 60.00%. Markup on cost = 120 ÷ 80 × 100 = 150.00%. The two ratios always describe the same dollar profit but use different denominators — margin divides by revenue, markup by cost. Use margin when comparing across companies (everyone reports it the same way); use markup when pricing a single product. Currency is a label only; there is no exchange-rate lookup.
FAQ
- What is the formula for gross profit margin?
- Gross margin % = (revenue − cost) ÷ revenue × 100. For revenue USD 200 and cost USD 80, the margin is 120 ÷ 200 = 60%.
- How is profit margin different from markup?
- Margin divides profit by revenue; markup divides profit by cost. A 60% margin equals a 150% markup on the same numbers — same dollar profit, different ratio.
- Is this gross margin or net margin?
- This tool computes gross margin (revenue minus direct cost). For net margin you would also subtract operating expenses, interest, and tax — use our Profit and Loss Calculator for that.
- What is a "good" gross margin?
- It depends entirely on the industry. Software and luxury goods often run 70%+, while groceries and commodity retail are typically 20–30%. Benchmark against direct competitors, not unrelated sectors.
- Can margin be negative?
- Yes — if cost exceeds revenue you are selling at a loss and the margin will be negative. The calculator surfaces this directly.
- Is anything sent to a server?
- No. All math runs in your browser; revenue and cost figures stay on your device.