Profit Margin Calculator

Profit margin % = (Profit / Revenue) × 100. First, calculate profit by subtracting cost from revenue. For example, if revenue is $1,000 and cost is $600: Profit = $400, so (400 / 1000) × 100 = 40% profit margin.

Profit margin is profit divided by revenue (selling price). Markup is profit divided by cost (what you paid). A 50% profit margin equals a 100% markup. They represent different perspectives on the same profit.

A "good" profit margin varies by industry. Retail typically sees 5-10%, restaurants 3-5%, software companies 20-40%. Generally, 10% is considered average, 20% is good, and 25%+ is excellent.

Increase profit margin by either raising prices (increasing revenue) or reducing costs. Focus on high-margin products, negotiate better supplier rates, reduce waste, or add value to justify higher prices.