How do I calculate gross profit margin?

Gross Profit Margin = ((Revenue − COGS) / Revenue) × 100. For example, if revenue is $500,000 and cost of goods sold is $300,000: Gross Profit = $200,000, Gross Margin = ($200,000 / $500,000) × 100 = 40%. The Gross Margin tab calculates this automatically and compares your margin to industry benchmarks.

What is the difference between gross margin and net margin?

Gross margin measures profitability after deducting only the direct cost of producing goods (COGS). Net margin deducts all expenses — COGS, operating expenses (SG&A, R&D), interest, and tax — to show what percentage of revenue becomes actual profit available to shareholders. Net margin is always lower than gross margin.

What is the difference between markup and margin?

Markup is expressed as a percentage of cost price. Margin is expressed as a percentage of selling price. A 50% markup means the selling price is 1.5× the cost — but the margin is only 33.3%. A 50% margin means half the selling price is profit — which requires a 100% markup on cost. They measure the same profit in different ways, so it is essential not to confuse them.

How do I convert markup to margin?

Margin = Markup / (100 + Markup) × 100. For example, a 60% markup: Margin = 60 / 160 × 100 = 37.5%. To convert margin to markup: Markup = Margin / (100 − Margin) × 100. For example, a 40% margin: Markup = 40 / 60 × 100 = 66.7%. The Markup vs Margin tab does both conversions instantly and includes a full reference table.

How do I calculate the break-even point?

Break-Even Units = Fixed Costs / (Selling Price − Variable Cost per Unit). The denominator (Selling Price minus Variable Cost) is called the contribution margin per unit. For example, fixed costs of $50,000, selling price $25, variable cost $10: Break-Even = $50,000 / ($25 − $10) = 3,333 units. Break-Even Revenue = Break-Even Units × Selling Price = $83,333.

What is EBITDA margin and how is it different from operating margin?

Operating margin (EBIT margin) = EBIT / Revenue. EBITDA margin adds back non-cash charges — depreciation, amortization, and sometimes stock-based compensation — to EBIT before dividing by revenue. EBITDA margin is always equal to or higher than operating margin and is widely used in valuation to approximate operating cash flow generation, stripping out accounting and financing differences between companies.

What is a good profit margin?

It depends heavily on the industry. Software and SaaS companies typically achieve gross margins of 70–80%. Retail businesses often see gross margins of 25–40%. Net margins vary even more widely: tech companies may net 20–30%, while grocery retailers may net only 1–3%. Always compare margins to industry-specific benchmarks rather than a universal standard. The Gross Margin tab includes benchmarks for 9 common industries.

Is this profit margin calculator free?

Yes. The Profit Margin Calculator Pro on StockToolHub is completely free to use with no registration, account, or subscription required. All five tabs are fully accessible.

Profit Margin Calculator Pro — Gross, Net, Operating & Break-Even

Revenue & Cost of Goods

Revenue (Sales)

Cost of Goods Sold (COGS)

Direct costs: materials, labor, manufacturing

Industry Context optional

Industry Benchmark

Gross Profit Margin

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Enter revenue and cost of goods sold

Gross Profit

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Cost of Goods Sold

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COGS as % of Revenue

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Revenue per $1 of Cost

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Revenue Breakdown

Product Cost

Cost Price

Your cost to produce or purchase the item

Enter One — Get Both

Markup %

% above cost price

Margin %

% of selling price that is profit

Or enter selling price

Selling Price

Calculates both markup and margin

Profit Margin

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Enter cost price and markup, margin, or selling price

Markup %

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Margin %

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Selling Price

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Profit per Unit

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Markup ↔ Margin Conversion Reference

Markup %	Margin %	Revenue Multiple

Cost vs Profit Split

What each tab calculates

Gross Margin

Revenue minus Cost of Goods Sold expressed as a percentage. The first and most important profitability measure — showing how efficiently a business produces its products. Includes industry benchmarks for context.

Net Margin

The true bottom-line margin after every expense: COGS, operating costs, interest, and tax. Shows what percentage of revenue becomes actual profit. Includes a waterfall chart from revenue to net income.

Operating Margin

Profit from core business operations before interest and tax (EBIT). Also calculates EBITDA margin with optional D&A and stock-based compensation add-backs. Displays a full margin stack comparison.

Markup vs Margin

Convert between markup percentage (% above cost) and margin percentage (% of selling price). Enter any one of cost, markup, margin, or selling price and get all the others instantly — plus a conversion reference table.

Break-Even

Find exactly how many units you must sell to cover all fixed and variable costs. Enter a profit target to see units needed beyond break-even. Visual break-even chart shows the exact crossover point.