Profit Margin Calculator
Calculate gross margin, net margin, markup, and profit percentages for your business
Financial Details
Select your preferred currency
£
Total selling price or revenue from the product/service
£
Direct costs to produce the product (materials, labour, etc.)
£
Additional expenses (marketing, rent, utilities, etc.)
Quick Examples
Retail Product
Revenue: £100, COGS: £60, Expenses: £15
Service Business
Revenue: £500, COGS: £200, Expenses: £100
Digital Product
Revenue: £50, COGS: £20, Expenses: £5
Profit Analysis
Enter financial details to calculate margins
Profit margin analysis will appear here
Margin Breakdown
Financial Summary
Understanding Profit Margins
Types of Profit Margins
- Gross Margin: Revenue minus cost of goods sold, divided by revenue
- Net Margin: Revenue minus all costs (COGS + expenses), divided by revenue
- Markup: Profit divided by cost of goods sold, shows pricing above cost
- Profit: Total revenue minus all costs and expenses
Key Formulas
- Gross Margin: (Revenue - COGS) ÷ Revenue × 100
- Net Margin: (Revenue - COGS - Expenses) ÷ Revenue × 100
- Markup: (Revenue - COGS) ÷ COGS × 100
- Profit: Revenue - COGS - Expenses
Industry Benchmarks
- Retail: 20-50% gross margin
- Manufacturing: 25-35% gross margin
- Software/SaaS: 70-85% gross margin
- Restaurants: 60-70% gross margin
What's Included in COGS?
- Raw Materials: Components and supplies used
- Direct Labour: Wages for production workers
- Manufacturing Overhead: Factory rent, utilities
- Shipping: Costs to deliver to customers
Operating Expenses
- Marketing: Advertising and promotion costs
- Administrative: Office rent, salaries, insurance
- Sales: Commission, sales team expenses
- General: Utilities, professional services
Improving Margins
- Increase Prices: Raise selling prices strategically
- Reduce COGS: Negotiate better supplier rates
- Improve Efficiency: Streamline production processes
- Product Mix: Focus on higher-margin products
- Volume Discounts: Bulk purchasing to reduce costs