Business Calculator
Profit Margin Calculator
Calculate your gross profit margin, operating profit margin, net profit margin, profit, markup, and business profitability from your revenue and costs.
Business Details
Enter your sales revenue and business costs to calculate profitability.
Total sales or business revenue for the period.
Direct costs associated with producing or delivering the goods or services sold.
Expenses such as salaries, rent, utilities, marketing, administration, and other operating costs.
Interest, taxes, exceptional expenses, and other costs not included above.
Net profit
KSh 0
Net profit margin
0%
Gross profit
KSh 0
Gross margin
0%
Profitability Summary
Revenue
KSh 0
Cost of goods sold
KSh 0
Operating expenses
KSh 0
Other expenses
KSh 0
Operating profit
KSh 0
Operating margin
0%
Margin Analysis
See how revenue changes into gross, operating, and net profit.
| Measure | Amount | Margin |
|---|---|---|
| Revenue | KSh 0 | 100% |
| Gross profit | KSh 0 | 0% |
| Operating profit | KSh 0 | 0% |
| Net profit | KSh 0 | 0% |
Markup Analysis
Profit margin and markup are different measurements. Markup compares profit with cost, while margin compares profit with revenue.
Gross markup
0%
Net markup
0%
Profit per revenue unit
0%
Revenue Breakdown
A simple view of how revenue is allocated across costs and profit.
What Is Profit Margin?
Profit margin measures how much of a company's revenue remains as profit after specified costs and expenses are deducted. It is normally expressed as a percentage of revenue.
A business can have strong sales but a relatively low profit margin if its costs are high. Conversely, a business with lower revenue can potentially generate attractive profits if it operates efficiently and maintains healthy margins.
Gross Profit Margin
Gross profit is calculated by subtracting the cost of goods sold from revenue. Gross profit margin shows how much revenue remains after direct production or delivery costs.
Gross Profit Margin = (Revenue − Cost of Goods Sold) ÷ Revenue × 100
Operating Profit Margin
Operating profit takes operating expenses into account after gross profit. Operating margin can help businesses evaluate the profitability of their core operations.
Operating Margin = Operating Profit ÷ Revenue × 100
Net Profit Margin
Net profit margin measures the percentage of revenue that remains after the costs and expenses included in the calculation have been deducted.
Net Profit Margin = Net Profit ÷ Revenue × 100
Profit Margin Calculator FAQs
How do I calculate profit margin?
Profit margin is generally calculated by dividing profit by revenue and multiplying the result by 100. Different profit margins can be calculated depending on which costs are included.
What is the difference between gross margin and net margin?
Gross margin focuses on revenue remaining after direct costs, such as the cost of goods sold. Net margin considers additional expenses included in the net profit calculation.
What is the difference between margin and markup?
Margin measures profit as a percentage of selling revenue. Markup measures profit as a percentage of cost. The two percentages therefore are not normally the same.
Can a business have a negative profit margin?
Yes. If total costs and expenses exceed revenue, the business has a loss and its profit margin will be negative.
What is a good profit margin?
There is no single profit margin that is appropriate for every business. Healthy margins vary significantly by industry, business model, pricing strategy, operating costs, competition, and scale.
Can I use this calculator for a small business?
Yes. The calculator can be used for many types of businesses, including service businesses, retail businesses, online businesses, professional practices, startups, and other commercial operations.
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