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Profit Margin Calculator

Our profit margin calculator simplifies understanding your business's profitability. Easily input your cost of goods sold (COGS) and revenue to gain valuable insights into your profit margin.

On This Page: FAQ | More Calculators
 

Profit Margin

Profit Margin =
(Revenue - COGS)
Revenue

Understanding profit margin is crucial for assessing business profitability. It represents the percentage of revenue that exceeds the costs of goods sold (COGS). A higher profit margin indicates better financial health. For more insights into optimizing profit margins and pricing strategies, explore our Markup Calculator to determine optimal markup percentages.

What is a good profit margin for my business?

A good profit margin varies by industry but generally ranges between 10% to 20%. However, it's essential to compare your profit margin with industry benchmarks and consider factors like business size and market conditions.

How can I improve my profit margin?

You can improve your profit margin by reducing costs, increasing prices, improving operational efficiency, and diversifying product offerings. Regularly monitoring your profit margin and making strategic adjustments is key to long-term profitability.