Profit Margin Calculator

How This Profit Margin Calculator Works

This tool calculates Gross and Net Profit Margins for your business. It shows your profit in dollars and as a percentage. It uses simple formulas to give clear results.

How to Use This Tool

1. Enter Your Revenue ($):

   Type your total sales revenue. This is the complete income from your sales.

2. Enter Your Cost of Goods Sold (COGS) ($):

   Input the direct costs to produce your goods or services.

3. Enter Operating Expenses ($):

   This is optional. It covers overhead, salaries, rent, and similar costs.

4. Click Calculate:

   After entering your numbers, click the "Calculate" button. The results show immediately below.

What the Output Means

The tool presents two main sections.

• Gross Profit Analysis:

  This section shows the difference between Revenue and COGS. It then calculates the Gross Profit Margin as a percentage.

• Net Profit Analysis:

  If you enter Operating Expenses, you also see the Net Profit and its margin. This shows profit after all expenses.

Interpreting the Results

A short message helps you understand your margins.

• If your Gross Margin is low, consider reducing costs or rethinking your pricing.
• If your Gross Margin is high, your business has good profitability.

Limitations and Special Notes

Enter only positive numbers. Revenue cannot be zero or negative. The tool does not use complex inputs. It uses basic arithmetic to deliver results.

If you do not fill in required fields, a clear error message appears.

Common Use Cases

This profit margin calculator is helpful for small business owners. It works well for managers who review performance. It also fits students learning about business finance.

By following the steps, you get fast, reliable insights. Try it to watch your business numbers come alive.