{
  "slug": "margin",
  "title": "Profit Margin Calculator",
  "heading": "Profit Margin Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/margin",
  "summary": "Gross margin, net margin, and profit per sale.",
  "description": "Margin is profit as a share of the selling price — not of cost. Confusing margin with markup is the single most common pricing mistake in small business.",
  "formula": "Margin % = (Revenue − Cost) ÷ Revenue × 100.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=margin",
  "inputs": [
    {
      "id": "revenue",
      "label": "Revenue",
      "kind": "number",
      "hint": null,
      "default": 100,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "cogs",
      "label": "Cost of goods sold",
      "kind": "number",
      "hint": null,
      "default": 62,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "operating",
      "label": "Operating expenses",
      "kind": "number",
      "hint": null,
      "default": 18,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "grossMargin",
      "label": "Gross margin",
      "format": "percent",
      "hint": null,
      "primary": true
    },
    {
      "id": "gross",
      "label": "Gross profit",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "netMargin",
      "label": "Net margin",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "net",
      "label": "Net profit",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "markup",
      "label": "Equivalent markup on cost",
      "format": "percent",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Revenue: 100 $",
      "Cost of goods sold: 62 $",
      "Operating expenses: 18 $"
    ],
    "outputs": [
      "Gross margin: 38.00%",
      "Gross profit: $38.00",
      "Net margin: 20.00%",
      "Net profit: $20.00",
      "Equivalent markup on cost: 61.29%"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter revenue ($).",
      "Enter cost of goods sold ($).",
      "Enter operating expenses ($).",
      "Read your gross margin on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "revenue": 60,
        "cogs": 37,
        "operating": 11
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "revenue": 100,
        "cogs": 62,
        "operating": 18
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "revenue": 160,
        "cogs": 99,
        "operating": 29
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the profit margin calculator work?",
      "a": "Margin is profit as a share of the selling price — not of cost. Confusing margin with markup is the single most common pricing mistake in small business. The underlying maths is: Margin % = (Revenue − Cost) ÷ Revenue × 100."
    },
    {
      "q": "What do I need to enter?",
      "a": "3 values: revenue, cost of goods sold, and operating expenses. Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the gross margin result mean?",
      "a": "It is returned as a percentage and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/markup",
    "https://www.revenuelab.fyi/toolbox/break-even",
    "https://www.revenuelab.fyi/toolbox/gross-profit"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Profit Margin Calculator (https://www.revenuelab.fyi/toolbox/margin)"
}