How to calculate profit margin
Profit margin (calculation)
Profit margin is profit divided by revenue, times 100. There is a gross profit margin (bigger) and a net profit margin (smaller).
Gross profit margin

Gross profit margin shows what portion of sales income you can keep in the business
Net profit margin

How to calculate profit margins
Example of profit margin calculations
Let’s say your business makes $20,000 by cleaning offices. It costs you $8000 to provide those services, so your gross profit is $12,000. You spend another $3000 on operating expenses and $4000 on taxes, so your net profit is $5000.
Here’s how to work out your margins.

