Understand the financial health of your business. Our free calculator helps you determine your gross profit margin and markup percentage based on cost and revenue. 

Your Business Is Making Sales. But Is It Making Money?

As an entrepreneur, seeing revenue come in is exciting. Every sale feels like a win. But revenue is only half the story. The most critical question for the health and survival of your business is: after all your costs, how much of that revenue is actual profit?

That's where profit margin comes in. It’s a simple percentage that tells you how profitable your company is. A business can have millions in revenue but still fail if its profit margin is too low. Understanding and tracking this number is essential for making smart business decisions.

Why Every Business Owner Needs to Know Their Margin

Calculating your profit margin isn't just an exercise for accountants. It helps you:

• Measure Your Financial Health: It's a key indicator of how efficient and sustainable your business is.

• Make Smart Pricing Decisions: See how changes in your pricing or costs will impact your overall profitability.

• Compare to Your Industry: Benchmark your performance against competitors to see if you are on the right track.

• Secure Loans & Investments: Banks and investors will always want to see a healthy profit margin before they give you money.

How to Calculate Your Profit Margin Easily

You just need two numbers: your cost and your revenue.

1. Open the Profit Margin Calculator: Go to the FreeXTool Profit Margin Calculator.

2. Enter Your Cost: Input the "Cost of Goods Sold" (COGS). This is how much it cost you to produce the product or service.

3. Enter Your Revenue: Input the "Revenue." This is the total price you sold the product or service for.

4. Get Your Results: The calculator will instantly show you your Gross Profit, your Markup Percentage, and your Gross Profit Margin.

Pro-Tip: What's a "Good" Profit Margin?

There's no single answer! A "good" profit margin varies wildly by industry. A software company might have an 80% margin, while a retail grocery store might have a 2% margin and still be very successful. The key is to research the average profit margin for your specific industry and use that as your benchmark.

Manage your business finances with these essential tools:

• Invoice Generator

• Business Loan Calculator

• ROI Calculator