#profit-margin-calculator-wrapper h2 { color: #1a1a1a; text-align: center; margin-bottom: 25px; font-size: 28px; }
.input-group { margin-bottom: 20px; }
.input-group label { display: block; margin-bottom: 8px; font-weight: 600; color: #444; }
.input-group input { width: 100%; padding: 12px; border: 1px solid #ccc; border-radius: 6px; font-size: 16px; box-sizing: border-box; }
.calc-btn { width: 100%; padding: 15px; background-color: #007bff; color: white; border: none; border-radius: 6px; font-size: 18px; font-weight: bold; cursor: pointer; transition: background-color 0.2s; margin-top: 10px; }
.calc-btn:hover { background-color: #0056b3; }
#results-area { margin-top: 30px; padding: 20px; border-radius: 8px; background-color: #f8f9fa; display: none; }
.result-row { display: flex; justify-content: space-between; padding: 12px 0; border-bottom: 1px solid #dee2e6; }
.result-row:last-child { border-bottom: none; }
.result-label { font-weight: 600; color: #555; }
.result-value { font-weight: bold; color: #007bff; font-size: 18px; }
.article-section { margin-top: 40px; line-height: 1.6; color: #444; }
.article-section h3 { color: #1a1a1a; margin-top: 25px; }
.formula-box { background: #eee; padding: 15px; border-left: 5px solid #007bff; margin: 15px 0; font-family: monospace; }
function calculateProfitMargin() {
var revenue = parseFloat(document.getElementById('pm_revenue').value);
var cogs = parseFloat(document.getElementById('pm_cogs').value);
var operating = parseFloat(document.getElementById('pm_operating').value) || 0;
if (isNaN(revenue) || isNaN(cogs) || revenue 0) ? (grossProfit / cogs) * 100 : 0;
document.getElementById('res_gross_profit').innerText = '$' + grossProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_gross_margin').innerText = grossMargin.toFixed(2) + '%';
document.getElementById('res_net_profit').innerText = '$' + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_net_margin').innerText = netMargin.toFixed(2) + '%';
document.getElementById('res_markup').innerText = markup.toFixed(2) + '%';
document.getElementById('results-area').style.display = 'block';
}
Understanding Profit Margin Calculations
Profit margin is a key financial metric used to assess the profitability of a business activity. It represents the percentage of revenue that remains after all costs, taxes, and expenses have been deducted.
The Gross Profit Margin Formula
Gross profit margin focuses specifically on the relationship between sales revenue and the direct costs associated with producing those goods or services (COGS).
Gross Margin = ((Revenue – COGS) / Revenue) * 100
For example, if you sell a product for $100 and it costs $60 to manufacture, your gross profit is $40. Your gross margin would be 40%.
Net Profit Margin: The Bottom Line
While gross margin only looks at production costs, the net profit margin accounts for every single expense in the business, including rent, marketing, utilities, and taxes.
Net Margin = ((Revenue – Total Expenses) / Revenue) * 100
Margin vs. Markup: What is the Difference?
This is where many business owners get confused. Margin is based on the selling price, while Markup is based on the cost price.
- Margin: The percentage of the selling price that is profit.
- Markup: The percentage added to the cost price to get the selling price.
If an item costs $50 and you sell it for $100, you have a 100% markup, but only a 50% profit margin.
Why Monitoring Your Margins Matters
High revenue doesn't always equal high success. If your margins are too slim, a small increase in supplier costs or a slight dip in sales can push your business into a loss. By calculating these figures regularly, you can make informed decisions about pricing strategies, cost-cutting measures, and which products are actually worth your time.