Profit Margin Calculator

Understanding Profitability

Profit margin is a key indicator of a company's financial health. It measures how much profit is made for every dollar of sales generated. A higher profit margin indicates that a company is more efficient at converting revenue into actual profit. This calculator computes the gross profit margin, which is the profit left over after subtracting the cost of goods sold (COGS) from revenue.

Formula: Profit Margin = ((Revenue - COGS) / Revenue) * 100