Financial
Profit Margin Percentage
Calculate the profit margin as a percentage. This measures how much of each dollar of revenue a company keeps as profit after accounting for costs.
Excel Formula
=(A2-B2)/A2*100Step-by-Step Explanation
1
A2 is the revenue or selling price
2
B2 is the cost (COGS or total expenses)
3
(A2-B2) calculates the profit
4
Dividing by A2 converts to a ratio of revenue
5
Multiplying by 100 gives the percentage
Example
| Revenue (A) | Cost (B) | Profit Margin % (C) |
|---|---|---|
| $100,000 | $65,000 | 35% |
| $250,000 | $180,000 | 28% |
| $50,000 | $42,000 | 16% |
Result: Formula in C2: =(A2-B2)/A2*100 → 35%
Common Variations
Markup percentage
=(A2-B2)/B2*100Margin based on cost instead of revenue
Net margin
=(A2-B2-C2-D2)/A2*100After operating expenses and taxes
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